Usa Market

USA Market

US have the biggest market size about $78.8 bn among our countries in concern and growing at quite impressive rate of 13% for the last five years. However, the growth rate is lower in comparison to India and China. It has the highest internet penetration population of 72.5% in 2008. Number of people travelled in 2008 is 809.5 mn which is also the highest number of traveller. It would not sustain the same growth in future as its market growth will stagnate. Airlines are not offering any commission to OTA for selling tickets. So, OTA has to earn through brokerage charges from their customer only and those charges are very competitive as there are many competitors such as Travelocity, Orbitz, priceline.com etc. It would not be feasible to enter into a stagnant market with fierce competition. However, if a new entrant enters into OTA market, chances are very bleak to create service differentiation and induce the customer to buy ticket through it.

India Market

OTA business in India has grown with the average rate of 45.6% which is very high. However, the market size is very low. It was $ 0.6 bn in 2006 and expected to grow to $ 3.9 bn in 2011. Emergence of affluent, urban middle class and rise of low-cost common carriers has made it very attractive destination for OTA business and moreover, airlines are also offering 5-6 % of commission which is however, expected to come to zero as market becomes more mature. The grey concern would be the very low internet penetration of population. So, the OTA business has to offer reservation through call whose cost is higher than the internet based service and also it has to depend on the hotel reservation which is very fragmented in India. It requires investing significant amount of capital, time and efforts to build and maintain relationship with individual hotels. Infrastructure need to facilitate the online commerce, such as IT systems and