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Monday, 03 April, 2017, 11 : 50 AM [IST]

‘The value Booking.com delivers to hotels far exceed the cost’

Even though India is still a modest market for Booking.com in their overall APAC portfolio, the Priceline Group-owned Online Hotel Accommodation platform continues to invest in the market to be future ready. In an interaction with Oliver Hua, MD-APAC, Booking.com (Singapore) Pte. Ltd, P Krishna Kumar tries to understand the OTA’s India strategy.
Q.How was Booking.com’s journey in India and what has been the growth you are witnessing in India?
A. Booking.com came to India four-and-half-year ago. We started with a dozen hotels, few bookers and relatively small team. Today, we have expanded our operations in a big way with offices in Delhi, Mumbai, Bengaluru, Chennai, Goa and also looking at establishing our office in Kolkata. These offices cover not just India but neighbouring countries like Nepal, Bangladesh, Bhutan, etc. The business has grown ten-fold over the last four years for us. Today, we work with 20,000 hotels in India. It is a pretty nice number considering it is both for Indian hotels and Indian travellers booking hotels outside India.

Q.India has its own local OTAs which try all means including deep discounting tactics to acquire customers? How do you withstand this challenge?
A. What we are doing is sticking to what we are good at. We don’t want to participate in the discounting war. We don’t consider it as a sustainable business in the long run. We have to differentiate ourselves by delivering a better customer experience. Also, what we offer is huge selection in terms of inventory at the destination level. We have about 1.1 million hotels onboard globally representing 27 million rooms. This kind of choice and selection in terms of accommodation is our USP.

Q.Hotel companies across the globe are investing in technology to reduce dependence on OTAs to contain the huge commission they incur in the process. How do you see this relationship evolving?
A. It’s a symbiotic relationship. Hotel business always required intermediaries. They used to rely a lot on travel agents for a very long time, and paid commissions to them. There is a cost associated with every channel, whether it is direct sales, call centres, websites, etc. I think OTA is just another intermediary available to hotels. It’s up to them to balance the economics of different channels. Even, we pay a lot of money to Google for pay search. Of course, if customer comes directly to our website without going to Google click, we can save a lot of money. Therefore, we cannot stop working with Google. It is a simple commercial decision on the part of the principal how to work with different channels productively and profitably.

I am pretty sure that the value we deliver to our partner hotels far exceeds the cost.

Q. Mobile phones are largely becoming the preferred platform for travel search and booking for travelers. How Booking.com is enabling this shift?
A. Right now we do one-third of our total transactions through mobile platforms. We are device agnostic. It doesn’t matter to us through which platform the customer approach us – desktop, laptop, tablet, mobile, etc. As long as we are able to offer a booking experience and convert that customer, it is fine. Companies like Booking.com have the benefit of being well-scaled in terms of technology investments in sync with the changing customer booking behaviour. So it is beneficial for our partners to use these updated platforms that we offer instead of investing money in developing their own platforms. It is not about developing applications, marketing the same is also pretty challenging.

Q.What kind of investment Booking.com is planning to make in India market in the coming years?
A. We are opening a new office in Kolkata later this year that will take our business to East India. In Goa we have a seasonal office now; we might look at converting it into a permanent office at some point of time in future. We are also trying to localise certain aspects of our website, mobile app, etc., with the support of our partners here in like MakeMyTrip, Ibibo, etc., to make the inventory available to their customers as well. Lastly, we are also investing in more local Hindi customer service agents, so that we can provide native language support to our consumers here. Right now we are doing it from Singapore, which is quite expensive to continue with. One day we will come over to India to set up call centres here.

krishna.kumar@saffronsynergies.in
 
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