Online travel agents go beyond discounts to net loyal customers

After luring travellers with discounted air fares, online travel agents (OTA) such as MakeMyTrip and Cleartrip are now shifting gears by rolling out new schemes to win their loyalty. While price-conscious travellers – those who are ready to buy tickets on any platform that offers discounts – drive up volumes for online travel players, the ones that stick to a particular site bring better margins.

“The aviation market in India is growing dramatically and we want to offer an experience that will make customers come back again and again. We’ve realised that just offering discounts cannot be our primary mode for customer acquisition,” said Subramanya Sharma, Chief Marketing Officer, Cleartrip.

Cleartrip has, therefore, rolled out a programme called Cleartrip Local, where a customer gets to book experiences such as concerts, eating out, local trips and guided tours. “If a customer uses this channel to pay for a local activity or experience, she is more likely to come back to the website when she wants to book a flight. And even when she’s not travelling but wants to do something fun in her home city, she is still engaged with our website,” says Sharma.

In August, MakeMyTrip – the largest domestic OTA by market share –introduced a loyalty programme directly linked to how much a customer spends through the website. You could use a wallet balance not just to book travel, but also get vouchers for cab rides or movies. The premium subscription programme gives travellers a full refund on flight and hotel cancellations, even if the airline had made the ticket non-refundable. For frequent travellers who fly, say 25-30 times a year, a spokesperson for MakeMyTrip said “fully refunding 10 cancellations in a year makes for a good offer. The core idea in launching this programme is customer retention”.

While none of the OTAs that BusinessLine spoke to disclosed numbers on the popularity of their schemes, whether the efforts will make customers stick remains to be seen.

Until then OTAs are going aggressive in offering discounts and cashbacks as new players enter the market. The latest entrant Paytm had offered massive cashback to its wallet users, making traditional OTAs up their discount game, too. MakeMyTrip, for instance, is spending even more now on marketing and promotion, well above their net revenue growth, to retain their market share.

Paytm, for its part, has set aside a marketing budget of nearly ₹400 crore to push its newly minted travel segment. Besides this, the company is also setting up an office in Bengaluru next month, to focus on capturing a significant market share in travel bookings. “We haven’t exhausted the ₹400-crore budget yet,” said Abhishek Rajan, Vice-President, Paytm, who heads the online marketplace’s travel unit. “We’re spending on cashbacks and offers and doing very targeted marketing like ads near the arrivals section at the Mumbai airport.

But even Rajan admits that discounting cannot be sustainable in the long-term. “We want to build a sustainable business with a robust product here because it cannot only always be about discounts,” said Rajan. “We plan to use a lot of data to personalise the booking experience for customers.”

Paytm, for instance, knows its wallet users’ travel habits, their shopping preferences, what their economic strata is from the utility bills they pay, whether they are frequent movie-goers, and the kind of entertainment they prefer.

The DGCA’s air traffic reports say that domestic passenger traffic rose nearly 22 per cent year-on-year in 2016-17 to 10.37 crore passengers in the whole year. Mahesh Y Reddy, Secretary General, Air Passengers Association of India, said: “These businesses need to keep changing strategies to retain the customers, whether this is offering concessions, discounts or absorbing some costs, free travel, or giving hotel vouchers. What matters is that in this competitive market, the traveler should benefit.”