Indian travel firms look online as demand soars

By Jasudha Kirpalani & Janaki Krishnan

MUMBAI (Reuters) - Booming demand from Indian tourists as well as rising tour costs are forcing travel firms to increase their services on the internet to remain competitive, top company officials and analysts said.

Indians travelling overseas rose 16 percent to 8.3 million in 2006, according to the government's tourism department, while domestic travel rose about 18 percent to 462 million, challenging the industry's ability to match the demand.

"If the 20th century was about sorting out supply, the 21st century is about sorting out demand," said Ram Badrinathan, senior analyst with PhoCusWright Inc, a travel research firm.

The quest to match the demand has not only forced newer entrants such as Yatra Online and MakeMyTrip to widen their communication channels, but traditional travel firms such as Cox and Kings (India) Ltd. and Thomas Cook (India) Ltd have also boosted their presence on the world wide web.

"Traditional players are embracing online today," said Emmanuel Phillips, senior consultant with Cox & Kings India, which has recently introduced online ticketing and booking of holiday packages on the web.

Rival Thomas Cook also started online ticketing recently.

The Indian online travel sector was estimated at $2 billion in revenues in 2007 and is forecast to grow to $6 billion in 2010, according to travel research group EyeforTravel.

Online services also help travel companies reduce costs as it means fewer support staff, need for less office space and the ability to give customers a wider choice.