Travelocity seek larger pie of online travel space

Travelocity (part of Sabre holdings) recently unveiled a campaign which plays on the word 'ocity' to draw consumer attention towards the brand.

The underlying message of this campaign is the online travel agent's promise of offering consumers the lowest price across domestic and international flights and 4,000 hotels.

This is made possible with a built-in search tool that trawls multiple travel service providers, and compiles a list of the lowest rates.

To live up to the promise, Travelocity assures it will refund the fare to users if they find a cheaper price on another website on the same day. The differential amount will be compensated by Travelocity in the way of coupons.

"The 'lowest price guaranteed' initiative, is not a short-term promotion, but a brand promise," says Himanshu Singh, managing director, Travelocity India. Hence the brand is going all out to promote this proposition through print, outdoor and online advertising.

The company refuses to disclose the amount spent on the campaign. Consumer activations at their offline stores, which came under their fold after the acquisition of travelguru.com in 2009, will also be part of the promotion.

Travelocity, which currently has 14 offline set-ups, plans to take the count to 30 this year.

Evidently, this initiative is geared towards capturing a larger chunk of the online travel market in India.

In 2010, the market was valued at Rs 25,258 crore (Rs 252.58 billion), and is expected to grow to Rs 38,890 crore (Rs 388.90 billion) by 2011, according to the Internet and Mobile Association of India.

Travel expenditures account for over 80 per cent of all spending on the internet. This market has many players but in terms of unique visitors per month Yatra.com leads the space followed by MakeMyTrip, Cleartrip and Expedia.
Travelocity is a distant fifth in the race (comScore March 2011).

The new proposition aims to strengthen the Travelocity brand which was a late entrant in the market.

"It is definitely a customer acquisition strategy and monetising the customer by way of coupons is a smart move," says Manoj Gursahani, chairman, TravelmartIndia.com and Vamoose.in.

Singh of Travelocity says international flights and hotel bookings are strong areas for the brand, and the company is looking to strengthen its revenue from domestic flight sales.

"It appears like a tactical consumer promotion which might help bring a few consumers on board," says the head of rival firm.

"For a travel website to succeed the user interface and customer service are very important and that is how we ensure consumers are loyal to us," he adds.

Rivals say Travelocity may lose out by promoting price over service, pointing out that for a small price differential, a customer will not switch to another online travel agent.

Differentiation is the name of the game in this market. Yatra.com, for example, offers cash on delivery, whereas Cleartrip scores over rivals with its excellent site manoeuvrability and user interface.

Both these sites also offer a WAP (wireless application protocol) site and are betting on the growth of 3G to drive sales through this platform.

Players like Yatra and Cleartrip offer other valued-added services like bookings for trains while MakeMyTrip offers bus booking options as well.