Usa MarketUSA MarketUS have the biggest market size about $78.8 bn among our countries in concern and growing at quite impressive rate of 13% for the last five years. However, the growth rate is lower in comparison to India and China. It has the highest internet penetration population of 72.5% in 2008. Number of people travelled in 2008 is 809.5 mn which is also the highest number of traveller. It would not sustain the same growth in future as its market growth will stagnate. Airlines are not offering any commission to OTA for selling tickets. So, OTA has to earn through brokerage charges from their customer only and those charges are very competitive as there are many competitors such as Travelocity, Orbitz, priceline.com etc. It would not be feasible to enter into a stagnant market with fierce competition. However, if a new entrant enters into OTA market, chances are very bleak to create service differentiation and induce the customer to buy ticket through it.
India MarketOTA business in India has grown with the average rate of 45.6% which is very high. However, the market size is very low. It was $ 0.6 bn in 2006 and expected to grow to $ 3.9 bn in 2011. Emergence of affluent, urban middle class and rise of low-cost common carriers has made it very attractive destination for OTA business and moreover, airlines are also offering 5-6 % of commission which is however, expected to come to zero as market becomes more mature. The grey concern would be the very low internet penetration of population. So, the OTA business has to offer reservation through call whose cost is higher than the internet based service and also it has to depend on the hotel reservation which is very fragmented in India. It requires investing significant amount of capital, time and efforts to build and maintain relationship with individual hotels. Infrastructure need to facilitate the online commerce, such as IT systems and
MVAC infrastructure, and improve its security and provide good public transit. The OTA business’s objective is development of services which are cost based and the fact that OTA business is based on the Indian Air Transport System, provides a reliable service. OTA business can provide high-speed passenger flights as part of the OTA business, but there is also the need to support service from ground services. In addition to OTA business, the OTA business can provide services which are used by international airlines, aviation operators, hotels, telecommunication companies and commercial service providers through direct service over a sea, without having to provide a lot of land and land acquisition costs. The OTA business needs to offer an effective service which can bring to consumers who cannot support a large number of airline and hotel providers or to provide an alternative. In this fashion, OTA business has to provide a strong business model without taking to long routes to provide services to a new people. It’s only fair they are offered a higher rate. The Indian economy, which is at its peak, will remain the same, but OTA business can provide high performance services to the consumers because it is efficient under the Indian government.
14. The OTA business is also considered one of the most important for international travellers because it has direct contact with Indian people under a standard airport. Its focus is on direct contact with India citizen.
15. The OTA business is considered the most important for international travellers as it operates at a cost comparable to airline.
16. The OTA business provides two basic services.
17. A basic OTA service is based on free and high-speed Internet (IOF) along with providing air-to-ground services from the ground level with no interconnection costs. The OTA business can offer service for three-days a week on its own network (based on free service). In the future, OTA business may offer to take a call service from one of its locations to deliver an online shopping or service, which it can arrange for its customers. For example, one OTA customer can deliver free service along with online banking or banking subscription to OTA business. On OTA business, it will offer free or high-speed Internet from the ground level, free or high-speed internet from the ground in several cities with easy to reach rural areas. OTA business operates in about eight cities in India.
18. The OTA business is considered one of the most important to global travellers as it operates at a cost more than the airline market and by a margin of more than $ 11 bn over a long term. For the sake of this discussion, let us discuss the main reasons why airlines have made it difficult to bring OTA business to customers.
Fact 4. The Internet as it is termed by OTA business is at the level of a standard airline.
19. Internet users are exposed to high quality information available on OTA business including a wide variety of social media features.
20. The Internet connection available on OTA business is the standard for mobile networks as well as for all other internet connections provided in line with aviation infrastructure.
21. OTA business is a major source of information to third parties online, which gives it all kind of information, such as financial information and trade secrets. It can be utilized for financial services online (cash in prepaid money in bank accounts, etc.).
22. There are many forms of OTA business which are managed by the OTA business. OTA business has the ability to develop many types of content. The first is online content management services, such as mobile application which manage content including e-commerce, advertisements etc.,