<aside> 💡 My name is Girish Kolari individual investor. This document created for my own educational purpose and not an investment advice. Any question or feedback please do reach me [email protected]

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Industry

OTAs, or Online Travel Agencies, are companies that specialize in selling travel-related products and services. These services include booking air tickets, hotel rooms, travel packages, bus tickets, and railway tickets through their websites and applications. Typically, OTAs act as third-party agents, reselling products and services provided by others in exchange for a commission.

Revenue Generation

The Major revenue source is taking rate**.** Take rate refers to the percentage of the total booking value that the OTA keeps as a commission for facilitating the booking. Apart from this OTA’s get income from incentives from GDS Galileo or Amadeus, convenience fees, cancellation fees, incentives from cards and the advertisement they show in its platform.

Factors Influencing Revenue Variation Among OTAs

• Larger, established OTAs have more leverage to negotiate take rates with suppliers due to their higher volume and reach.
• OTAs provide Advance deposits as suppliers would be slightly cash hungry. OTAs normally customize it by amount and duration based on the provider for optimized rate they get.

Market Share

• In the fiscal year 2023, the value of the travel industry in India is projected to reach between Rs 2,825 and Rs 2,845 billion, reflecting a Compound Annual Growth Rate (CAGR) of 6-8% from 2017 to 2023. The industry's growth trend is expected to continue.
• The Indian travel industry utilizes online booking for 66%-68% of its services. Out of this, Online Travel Agencies (OTAs) account for a 67%-69% share. The gross booking revenue of the OTA industry in India is projected to grow at a compound annual growth rate (CAGR) of 13-14% between fiscal years 2023 and 2028, amounting to Rs 2,440 billion - 2,460 billion.