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Formation of mega OTA in India a concern for agents
Rohit Kaul, New Delhi, November 3, 2016
 

Offline travel agents are having mixed reactions in the wake of the recent merger by Indian OTA giants MakeMyTrip and Goibibo.

 

The merger has resulted in the creation of a company that has more than 50 per cent of the market share cornered with no close competitor.

While some expect the combined entity to now have a more sustainable pricing strategy, others think the competition will only get more intense.

 

“Both these companies were earlier competing with each other and offering heavy discounts to customers,” said The Oasis Xpress Travel & Tours director Teddy Thomas. “With these companies now merged, it may result in less discounts, which then allows more yield for traditional travel agencies.”

 

MakeMyTrip and Goibibo agreed to merge in a stock transaction without indicating the value of the combined entity last month. The brands are expected to retain their identity once the transaction closes.

 

“I don’t see any effect on traditional agents. The merger happened as these companies were concerned about their losses because of unsustainable discounts they were offering. We as offline travel agents will continue to bank on our expertise and liaising directly with suppliers,” said Praveen Chugh, managing director at Business Travels.

 

However, some offline agents do expect tough competition post merger. Said Pradip Lulla, CEO of Cupid Travels & Tours: “The merger of MakeMyTrip and Goibibo will only make it more competitive for travel agents as the joint entity is expected to be more aggressive about their growth in India.”

 

Hoteliers meanwhile think that the merger is good for them and will drive customers back to the hotel’s own direct channels.

 

“In my opinion, the business model of Goibibo was a suicidal model and is an example of unethical business. Travel agents, tour operators and Indian OTAs suffered losses because of their heavy discounting. This merger will bring back healthy business practices but will surely result in stiffer competition for other OTAs,” said Sanzeev Bhatia, general manager, The Metropolitan Hotel & Spa New Delhi.

 

“Moreover, we expect that both companies will stay away from heavy discounting which will make tariffs on our website at par, resulting in more bookings for us through our own website.”

 
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