Sprice.com: On tapping the $2 billion online travel market in India

Posted on October 1, 2008
Filed Under Internet, Interviews / Leaders, E-Marketing & E-PR |

Interview with Vikas Gulati, Vice President of Marketing, Asia Pacific for Sprice.com, Europe’s leading real-time travel search engine, which expanded its global footprint into India recently.

Q. How big is the online travel market in India to justify your expansion to this country? What does Sprice mean to this sector?
The Indian online travel market which is expected to cross US $ 2 billion mark by 2008 has changed the old paradigm, providing customer a sophisticated online retail and shopping experience, and simultaneously enabling access to fragmented travel supply market.

While the Internet has significantly reduced the cost of distribution for travel suppliers, finding the most suitable package including the best hotel to stay in at the best price has become more complex for the travellers. Sprice.com addresses these concerns by introducing a real-time deep search technology, which offers travellers up-to-date information from different travel suppliers on air fares, hotel rates and traveller reviewed hotels from India on a single interface.

Q. What is the real differentiator for Sprice to be seen as the preferred online travel consultant of choice? What kind of services would you consider your strongest points?
A. We are the number one travel search engine in Europe and over time, we expect to become equally successful in Asia Pacific as well. Because of our unique technologies and user interface, we do not really have any direct competitors in the market.

Our unique strengths are:
(a) Real-time Deep search technology: Sprice.com operates via a real time deep search mechanism and it was the breakthrough innovation that gave rise to our search engine, which acts like hundreds of thousands of Internet users, searching for information on the Internet for us, in real time. Furthermore, consumers can expect not only to search flights which is often the preliminary search for travel information, but hotels and vacation packages too. We are the only Travel search engines among the global players who have the holiday package application and we plan to launch the application in India in coming months.
(b) User Generated Content: We have launched the latest Hotel application in India which allows user to search for the hotel of choice. Most meta search players search for only lowest price offers but consumers are not looking at only price when it comes to choice of stay. Sprice.com now is one of the largest database of user generated content on Hotels with not only user reviews but also photographs and quality ratings.
(c) Simple-to-use design and rich content: Last but not the least, we pride ourselves for being the most user-friendly travel search engine tool in the world. Our focus is not on cluttering the website with images and complicated functions, but to provide rich and relevant content for Internet users in different markets

Unlike OTAs, Sprice.com is not an online booking engine. For example, when a consumer searches for hotel deals on Sprice.com, he or she will be directed to a list of results. Once any of the offer links are selected and clicked on, the user will be directed immediately to the respective travel suppliers’ websites to make a booking decision. From user standpoint, there is tremendous value. Consider this: an average consumer checks 6 to 8 sources of information before making a purchase decision. Sprice.com aims to bring all these sources into one resource, allowing consumers to compare results from multiple sources on one single website. It is the only definitive travel search tool that any traveller needs for effective travel planning.

Q. When I ask for flights, say from DEL to FRA, why doesn’t it throw up all the leading airlines and gives me a choice of only 2-3? Seats are available on those through other booking engines.
A. I am not sure, when and what period you did the search for. Currently, a search for Del –FRA travelling on 3rd Oct and return on 7th gives me close to 60 offers across 12 airlines. That’s a significant choice for consumers.

Q. No one agent - online or real world - is seen to be offering the best deals for all the offerings. There is always a variation between agencies, and when operators offer direct bookings too. How does the customer resolve this other than trying his hand on multiple channels to get the best deal?
A. This very situation defines our reason for existence. Today’s consumers are thrown with millions of offers with each claiming to be the best. Sprice.com presents an objective view to all the offers from travels suppliers. We do not sell any product and hence are neutral.

Q. What segment of consumers in India do you see emerging as the biggest for online travel bookings over the next 1-3 years?
A. Strong growth of Internet penetration and rising income levels of middle class are interesting trends you can’t afford to ignore. We have to have relevant and meaningful content that enables consumer to plan their trips effectively. From content standpoint, we have relationship with over 300 suppliers globally and are capable to provide all kinds of offers: Low cost carriers to premium airlines, budget hotels to luxury living.

Q. How much of corporate and individual travel do you see using online as the principal medium for making travel bookings in India in the coming years? Would you see any strong reasons for this trend?
A. Online travel contributes to 70% on all e-commerce activities globally. I don’t see any reasons why India is going to be different. We definitely see increasing usage of online by both the corporate traveller and the individual traveler even though corporate travel, given their servicing requirements, may take little longer to convert to online. Given that most suppliers are developing infrastructure online to be able to service customers, this trend is
inevitable.

Q. Indians are long used to the travel agent as their advisor and consultant. Is this role being usurped by online professional and user generated content? Where does this leave the agent?
A. It is true that consumer spending on online travel is on the rise. After all, travellers are increasingly tech-savvy and seek greater control over their purchase decisions. More and more travellers also perceive online research as more credible and effective, since the Internet is a one-stop resource for a plethora of travel deals – as opposed to a brick and mortar travel agency.

That said, I believe the brick and mortar travel agency still has an important role to play in the market towards catering a separate target audience who will continue to demand the human touch and advice for travel deals and services. Therefore, while the Internet is a platform that brick and mortar travel agencies must acknowledge and even consider when planning the future of their business, it is not necessary that traditional travel agencies must go online or be doomed

Q. Travel and Tech in India: What do you see as emerging trends globally and in the Indian context? Would you have a tip / suggestion on spaces in this sector that entrepreneurs and investors should consider putting their money in?
A. There are a few key trends in the global travel technology space that we have observed:

1. Sophistication of the users – users are exercising lot of choices and don’t necessarily believe in what travel suppliers are putting up as best offers. A typical user would visit at least 6-8 sites before making a purchase decision. And this number is increasing year-on-year. Any technology that simplifies this comparison for the user is definitely creating value.
2. Use of Travel search engines – More and more internet users across the globe are leaning towards the use of travel meta search engines. Similarly, travel suppliers increasingly recognize the effectiveness of travel meta search engines such as Sprice.com as a marketing tool. We are an extremely profitable channel of marketing for travel suppliers. However, there is generally a lower level of awareness of travel meta search engines and their function among consumers and travel suppliers here in Asia including India.
3. User Generated content – This has become a critical component in the travel planning as consumers find user reviews and other feedback as most credible form of information in travel planning. This also build user loyalty and generates strong word of mouth. Any company that is able to leverage on this will create long term value

Overall, I would say that it’s important to consider following factors while considering starting or investing in companies:
a)    It has to have unique proposition for consumers
b)    It should be relevant and sustainable
c)     It should create real ‘value’ for all stakeholders (including consumers, partners etc)