1. Increasing hotel conversation by using the tactic
“For the consumer, By the consumer, To the consumer”
By: Ashwin Gopal and Sandhya Boyapathi | July 2010

2. Executive Summary
The Indian online travel industry has grown at a very fast rate in the last 5 years. As internet
and credit card penetration has increased, more and more customers have started to adopt the
e-commerce model. Online travel roughly contributes to around 85% of the total e-commerce
business in India. Domestic flight bookings control a very significant share of revenues for all
the OTAs.
One of the key travel products that still haven’t been able to catch up with the Indian
customers is Hotels. While in the West, booking hotels on internet is very common, the Indian
customer till now has not shown any real interest in booking hotels online. This is in spite of the
best efforts and investments made from all the large OTAs in the country.
Based on extensive research, some of the main reasons that customers do not buy hotels online
are
1. People prefer to call the hotel directly and bargain for the best deals rather than going
through an OTA
2. Country wide perception that online travel agents are purely air ticketing agents and cannot
guarantee a good experience with hotels
This document presents short term and long term solution for increasing the conversion rate of
Online Hotel Bookings. The solutions are synthesized after an extensive primary and secondary
research
The gold rush in E-Commerce space and the golden goose of OTAs (Online Travel Agents)
India has been the cynosure of internet and mobile based consumer businesses. With 800
million+ mobile subscribers, 100 million+ internet subscribers, 200 million credit/debit cards, 20
Million+ Facebook users, India has been in the forefront of internet and mobile usage.
With E-tail transactions crossing $400 million+ and poised to cross $12 billion by 2016,
undoubtedly It’s indeed a golden era for ecommerce in India.
OTAs are chasing everything to differentiate and woo consumer Very little opportunity on flight
prices as they come from common GDS source. All in all 2009 wasn’t the best year for OTA’s as
they tried their best to get out of the global slump and ventured into newer non air businesses.
In 2010 OTAs are moving beyond just ticketing sites and are looking at delivering holistic value
be it planning travel or holidays for its users or even more. With growth drivers – increasing
internet penetration (300 Million+ users), increasing usage of plastic money, awareness about
online booking advantages, By 2020 Indian OTA’s are expected to be among the top 3 fastest
growing OTAs in the world.

3. Competitive landscape in Hotel booking industry
Even though Make My Trip has the leading OTA with 48% market share and 87% of the
customers prefer Make My Trip as an OTA, TravelGuru is the market leader in hotel booking.
This is primarily because TravelGuru is positioned to cater B2B market.
Per day sales volume 2010
Consumer Behavior
 Secondary research revealed that, the time spent by the online users is skewing towards
content generation over other activities.
Skew in the Time Spent on the Web's 4 key activities
 The number of online queries for hotel bookings has increased fourfold in the past year
alone, but the conversion rates have been extremely low. Through focus group interviews, in-
depth interviews and surveys conducted across 146 consumers and 35 travel agents major
reasons that emerged for this low conversion are
 Lack of trust: A human interaction made them more comfortable with high involvement
bookings like hotel, holiday packages, etc. The travel agent would be there to tell them
stories about the good and bad things about the place, which though not necessarily
work effectively in convincing the consumer. Poor media content, out of date reviews,
bad descriptions is a put off despite attractive prices.
 Customers consider hotels as “experience” rather than a “commodity”. The OTAs have
not put insufficient effort to give a slice of hotel experience online which influences the
booking decision.

4.  Resistance to change – Relying on next door travel agent for hotels
The key insights through primary research combined with the secondary research revealed that
 77 % of online shoppers use reviews and ratings for purchase decision
 86 % of respondents prefer a friend's / user recommendation over a critic's / experts
review
 44% of people are drawn towards trying something new if it adds significant
convenience to them
These key insights impelled us to explore this opportunity spot for MakeMyTrip.
Customer segmentation:
From secondary research, we segmented the market as below.
 Mostly Business class traveler  Mostly domestic travelers  Both holiday trips and
 International and domestic  Advance booking of tickets business travels
flier  Extensive web search  Mostly domestic flights
 Advance and last minute  No preference for any airline  Last minute booking of
booking  Less importance to travel tickets
 Less extensive web search  duration and time  Minimal web search
 Travel duration very important  Economic class travelers  No airline preference
 Medium Price sensitivity  Travel duration very
 High price sensitivity
 Associated with corporate important
houses
 Economic class travelers
 Zero price sensitivity
 Internet hours : >10 hours  Internet hours : 2 to 10 hours  Internet hours : All ranges
 Annual income >10 lacs  Annual income < 5 lacs  Annual income: All ranges
 Married/with kids  Single/Married/with kids  Mostly single
 Age groups more than 30  Age groups less than 30  Age groups less than 30
M  Low cost airlines  All kinds of airlines

5. MakeMyTrip is able to get customers onto its website but unable to acquire these customers.
This is evident from the 16% increase in online queries, with abysmal conversion rates.
We propose a short term and a long term strategy for MakeMyTrip in order to leverage its
leadership in airline travel and pave its way as the market leader in the online hotel and holiday
booking industry.
Short Term:
MakeMyTrip should use the 3 pronged Tease-Inspire-Involve approach in conjunction with
integrated brand communication.
Tease-Awareness should be created about the advantages and convenience offered by online
hotel bookings and holiday planning through educational articles in newspapers and even
movies. Additionally the ease of planning a trip using such services should be highlighted.
Inspire- To break the inertia, the psyche of the middle aged customer, who spends maximum
on travel and family holidays, should be eased through campaigns such as: ‘ Why go to a travel
agent? Now planning your holiday is so simple, that even your young one can do it for you!”
could be used. Capture the aspirations of the consumers through convenience and offers that
are better than anyone else.
Involve- Use channels such as FM and magazines to get people to talk about their perfect
MakeMyTrip holiday and give out gift hampers to the best stories. The idea here is to create
buzz around MakeMyTrip and increase its bran recall.
Long Term Solution:
With the advent of broadband internet, mobile internet, smart phones and GPS, users will be
incentivized to “check in” rich media content and recommendations of hotels in MakeMyTrip
website. Bringing consumer into the business value chain, MakeMyTrip can use the power of
community to push repeat sales.
How does the “Check in” mechanism Work?
Check In: Consumer activates Validate: MMT validates the Go Live: Validated data goes live.
information regarding a hotel entered data and passes / blocks Consumer gets a next trip
and “check in” to the the data entered discount/check in points
MakeMytrip system redeemable against next booking

6. As the content and recommendations posted are by end users, MakeMyTrip ensures
transparency by eliminating the doubt about the quality and experience of the hotel. We
propose that the power of social networks should be harnessed to create viral campaigns about
recommendations made by the users…
Operation model
User posts rich media content in MakeMyTrip.
Visitors get a slice of “experience” of a hotel and thus building the
trust.
This will lead to a booking. As time passes, a social network will
evolve within MakeMyTrip and user will start believing the
recommendations

7. The advantages of this idea are
1> As MakeMyTrip provides technology and platform for creating viral campaigns for hotels,
MMT’s bargaining power increases. This can be enchased to ensure “lowest price” for hotel
accommodations.
2> Users get first hand recommendations from friends (spread through social network). This
will not only lead to very high conversion rates but also bring in new customers because after
getting influenced by friend’s recommendation, non MakeMyTrip users will start booking via
MakeMyTrip.
The challenge
It will take a formidable effort and time to build traction with the users to write reviews and
upload stuff. Hence we propose MakeMyTrip to have content partnership with likes of
TripAdvisor.in who already has plethora of reliable reviews by the users. Going ahead
MakeMyTrip users will shape the review system.
Embracing the middle age customers – A new point of service
India has the largest Postal network in the world with 1,55,618 Post Offices. With the
emergence of courier services, Indian Postal System is underutilized. We propose MMT to have
a strategic tie-up with Indian Postal System such that the internet enabled Post Offices (close to
26,000 of them and increasing at a rapid pace) will act as the point-of-service for disbursing the
tickets. About 32% of the middle aged people in India own some form of savings scheme in
Postal Office and they have the “trust” factor associated with the Postal Office. These non-
internet savvy users will go to post-office and book a hotel ticket.
The offline activation
We propose MakeMyTrip to increase the media spend to Television Ads and screen the same
during soap operas. The rationale is to target economic segment especially, the people of 35-50
age bracket.
Conclusion
MakeMyTrip needs to leverage on its lead in market share and the high brand recall that it has
by giving consumer an experience he/she hasn’t had before as well as not provided by other
OTAs. Our solution with a philosophy of “For the consumer, By the consumer, To the consumer”
will indeed solve the challenge of low conversion rates in online hotel booking. Trust factor in
taken care as the users are the one who will rate and review the hotels. The rich media content
uploaded by the users give a real slice of hotel’s experience. This “human” aspect is the core
value proposition of our solution.

8. References
[1] ComScore Online Travel Trends In India (2010)
[2] Travel and Tourism – India - Euromonitor International (2010)
[3] Online travel Report India – ResearchOnIndia
[4] McKinsey Global Institute research Report on consumer spending in India
[5] “Future of India Post – Rural Dimension” by Harinder Singh