"We believe in the scalability of a pure online model": Cleartrip

Travel Distribution Asia Special: By EFT Correspondent
   
Online travel agency Cleartrip.com is set to garner gross sales of over US$100
million in the first year of its operations in India.

Last year, during EyeforTravel.com's inaugural event in New Delhi,
Cleartrip.com had shared that it had set a target of 400,000 transactions in
the first 12 months of operations in India. And the company had marked media
exposure worth over US$6.6 million to achieve the same.
   
Assessing the operations, Cleartrip.com's chief executive officer Sandeep
Murthy said, "(On targets) We are well on our way to surpass this mark. We
should close the first 12 months with 480,000 transactions with a gross sales
of over US$100 million. We have seen a prolific rise in numbers since November
2006 and we are reaching new heights in our sales volume almost every week
every since November."
   
"On the media exposure, we have achieved great recall through our dominant
`Share of Voice' campaign across the print, online, TV and below the line
activities. We also have, within a short span of time created positive word of
mouth for the booking experience on Cleartrip that has generated repeat
business," said Murthy, who was recently in Singapore for EyeforTravel's Travel
Distribution Summit Asia '07.
   
Murthy, in an interview with EyeforTravel.com's Ritesh Gupta, shared more info
on Cleartrip.com and the overall online travel business. Excerpts:   
 
What would you term as the key milestones in the journey so far? How has
cleartrip.com differentiated its offerings?

We are obsessed about `Search' and we have the most comprehensive and
compelling search product out there. Our proprietary display of roundtrip
flights on the same page, the ability to combine airlines, realtime updation of
flight price, honest display of price (break-up of base fare and taxes),
flagging off etickets / paper tickets etc has been appreciated in most of the
customer feedback we have received.
   
Our comprehensiveness of the air product is yet another milestone. We are the
only OTA offering online booking of eight domestic carriers in India.
Scalability of technology using a more long term approach with airline partners
on integration through APIs have been a key milestone and enhances the customer
experience. Our ability to deliver exclusive deals as a new player in the
market has been another significant achievement.
   
Another key milestone is that Cleartrip has achieved within eight months of
operation, is that we are a very close second in the domestic travel retail
space.
   
What kind of response has the portal managed from its strategy of promoting
offers from time to time?
   
We have used our elaborate Marketing Plan very effectively to partner with
airlines and hotels to offer customers great deals. Since most of the deals we
offer have been exclusive, this has generated great interest and sales volume.
Our objective is to make travel simple and by doing that make getting deals in
travel also simple for our customers.
   
Our current position is a result of our obsession on the customer, the
customer experience and our ability to continually deliver the best value
 
During our inaugural event a tour operator stated that most online players are
really offline and costs are bloated as some OTA have larger staff pools than
traditional players. How have you taken care of such concerns?
   
This is an independent comment made by a traditional tour operator and we do
not subscribe to it.
   
We believe in the scalability of a pure online model and this is exactly the
ethos of Cleartrip. With a staff to transaction ratio of 1 : 50, we are the
most efficient online business today. We continue to grow the online model and
sustain its scalability.

It was also stated that the challenge is actually conduct online bookings,
payments and fulfillment seamlessly with next to no human interface. What's
viewpoint on all these issues related to OTA business?
   
Over 99 percent of our bookings are online.
   
It was felt that joint online and offline model is imperative to succeed in
India - as it solves the BTQ issues and takes care of customer apprehensions
paying larger volumes online. Do you agree with this?
 
Where complex products like international tour packages are concerned, the
presence of offline sales will be beneficial. But we are confident that our
model will successfully remain largely online focused as we transition into the
international product line.
 
How is your relationship with airlines evolving, especially considering the
focus of airlines on ancillary revenues?
   
We have been working closely with airline partners to structure activities
with the understanding of data and how we can grow both our businesses keeping
in mind their objectives as well
   
We have successfully worked with all airline partners on special promotions
for customers.
   
How quickly do you expect hotels booking to account for significant portion of
bookings vis-à-vis airline bookings?
   
Hotels is currently a small share of the pie. Given the revenue contribution
of hotels, it is critical to achieve the optimum hotel mix in the product
portfolio. The technology challenges currently in hotels are much more than
that on the air product. This will however change in 2007. Also the ever
increasing demand will be fulfilled by the addition to supply. I see a
substantial increase in volume of hotel sales in 2007. However given the
increase in sales on the air product, I don't see the percentage mix changing.