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Online travel firms witness steady growth

By SiliconIndia | Sunday, 14 December 2008, 23:29 Hrs

New Delhi: The websites whose businesses concentrate on selling air tickets and hotel supplies are witnessing a steady growth, reports mint, quoting company officials and analysts.

Firms including MakeMyTrip (India), Cleartrip Travel Services and Arzoo.com, are seeing their low-volume, high-margin hotel bookings expanding some 10-25 percent every month for the past six-eight months.

Deep Kalra, CEO and founder of MakeMyTrip, said, "The hotel business is a fast growing and important segment for MakeMyTrip. In early 2007, we generated 10 percent of our total revenue from hotel bookings. In the last quarter, this rose to 34 percent."

"Consumers are more comfortable in buying hotel supply online now because of a lot more user-friendly information. A lot of hotel supply is coming out in the market in the next couple of years," said Ram Badrinathan, GM, Asia Pacific, at PhoCus Wright, a travel business focused technology research firm, who said online hotel bookings market is growing at 80-90 percent a year.

The Sabeer Bhatia-run Arzoo.com generates around 60-70 percent of its business from air tickets, but has seen a monthly 10 percent growth in its hotel business for the past six months.

"Two years back, hotels contributed not even 0.25 percent of our total business, but now that is 4-5 percent. In the next year, we expect this to grow exponentially," said Amal Parandare, GM, India operations at Arzoo.

What adds cheer to these online firms is a government data, which shows India currently has around 90,000 hotel rooms, and needs some 350,000 rooms by 2010 Commonwealth Games in New Delhi.

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