Tag Archives: ota

Search Engine Optimization or Traffic Hijacking

Search Engine Optimization or Traffic Hijacking – What really goes on Page 2, Page 3 and beyond…
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With online advertising getting more and more driven towards performance based metrics – the ways to channelize affiliate marketing for performance have taken some interesting turns – and no one is taking a notice of this. Online marketers seem to be so focussed on just numbers through its media partners and not really on how they are achieved.
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So putting ahead here a case with its example which I discovered today. Right or wrong – I will leave it for someone else to judge! – but this might be true for many brands in India.
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But for the fact – delivery of some performance based marketing is getting blurry. It looks more like attempts of good SEO techniques exploring more than what they should have since Online Marketers are have not yet noticed it. This might be controversial – but eCommerce services and mostly travel (OTAs and Airlines) companies may be paying up some performance marketers for just no reason.
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Example – Jet Airways
There are significant number of searches for “Jet Airways” and related searches everyday on Google and other search engines. The most valid websites that user would expect are – of course www.jetairways.com or www.jetlite.com – and then there are list of websites which are without any doubt not owned by Jet Airways – that appear on Page 2, Page3, and beyond.
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Here are few of them are listed below, each one of them uniquely optimized for related search terms consumers will use while they are searching for “Jet Airways” –
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The above listed web sites are just few of the many – I did not explore much. One look at most of them – and you will realize that are built to get free extra revenue through display advertising and affiliate marketing.
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So why should a brand like Jet Airways (or your brand) worry about –
  1. Loss of Traffic
    The above websites are SEO optimized for search queries related to Jet Airways. No doubt they are ranked well, hence receive significantly higher traffic – which originally should have been received by Jet Airways website by default (in event this websites were absent).

    These websites are so well optimized that they might be taking about around 20%-30% (or more) of traffic that was meant for Jet Airways itself.

  2. Loss of Revenue
    Loss of traffic also means loss of revenue! No further explanation here.
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  3. Paying from its Pocket!
    Many of these websites are running affiliate tracking codes (mostly for Jet Airways itself) – which means indirectly Jet Airways is paying affiliate commissions for this diverted traffic originally meant for them. Are such affiliate cookies kept live for a longer period (say 30 days)? Imagine the loss of revenue.
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  4. Loss of Brand Value
    Frequent internet users directly reach destination websites, unsure how a normal internet consumer will react to this or if loss of brand value can be attributed. I landed on one of such websites today – first reaction – “What happened to Jet Airways website today?”
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So whats the big deal…
Instances mentioned above can be termed as traffic-hijacking through SEO – originally meant for the brand; but routed through another destination and then asking the brand to pay for it!
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SEO is all about playing with Google rankings – Google’s job is done when they show first 1-2 results accurately, the next results are optimized to rank better. Building such optimized landing pages by product companies like – Ixigo, Cleartrip, MakeMyTrip, Yatra, ezeeGo1, goIbibo etc should be fine – as in any case these websites clearly have a business model and have a service to offer directly to consumers.
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Disclosure –
Jet Airways is not singled out here in this post. I am a frequent flyer with Jet Airways (part of JetPrivilege for about last 5 years) and personally very satisfied till date with its services. The above example stands true for many leading Airlines and OTAs as well.
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Takeaway…
Are you a consumer facing brand in India – Google search your brand name and view each and every search result of your first 100 rankings!

Dissection of Online Travel Agent (OTA) Business: What is Market Size?

Once an VC-favorite business domain in India, Online Travel Agents (OTA) business model has been quite silent since last 2-3 years in this activity. Primarily cause Aviation industry suffered huge losses in this time and most of the plans to expand the aviation businesses in India fell flat post the recession on 2008-2009.

Of course the direct impact of this was on OTAs. Consolidation is expected to take place, naturally since the number of players in market today are probably equal to or more than the number of airlines operating in India. The big 3 of course are Cleartrip, MakeMyTrip & Yatra, however the question is are other players in market big enough or valuable to get acquired or carry any differentiators to be acquired.

Nevertheless, this post is about some number crunching and to answer the question – How big exactly is the OTA market for domestic flights? Taking a reverse approach on this… from Supply to Demand.
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Domestic Airline Fleet in India:

As of Airline Fleet Flights
Dec-09 Jet Airways 89 400
Dec-09 Jet Lite 19 110
Dec-09 Jet Konnect 19 125
Dec-09 SpiceJet 19 125
Dec-09 Indigo 24 155
Dec-09 Kingfisher & Red 66 400
Dec-09 Paramount Airlines 5 28
Dec-09 Go Air 8 55
Total All Private Airlines 249 1398

Note:
*indicative data only, gathered from various sources available like company websites, news, etc. Consider all numbers as indicative figures
* Data excludes Air India / Indian Airlines domestic flight operations
* Actual flights per day may be an lower number since most carriers operate multi-destination flights, like Mum-Kolkata-Guwahati
*Jet Airways fleet size may be fleet in service for both domestic/international operations.

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Maximum Tickets Available for Sale:

Airline Flights Seats Total
Jet Airways 400 200 80,000
Jet Lite 110 200 22,000
Jet Konnect 125 200 25,000
SpiceJet 125 200 25,000
Indigo 125 200 31,000
Kingfisher & Red 400 200 80,000
Paramount Airlines 28 60 1,680
Go Air 55 200 11,000
All Private Airlines 1398 275,680

Total Tickets available for sale each day = Total Seats available = 275,680

*indicative data only, gathered from various sources available. Consider all numbers as indicative figures
* Actual number of seats available may be lower than mentioned since flights operated may be lower, as mentioned in previous slide
* Most airlines in India operate Airbus/Boeing aircrafts with which seating configuration varying between 180 to 220
* Full service airlines like Jet Airways & Kingfisher operates flight with business class seats, and have ATR aircrafts in fleets as well
* Paramount  Airways flies smaller Embraer  aircrafts

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PLF – Passenger Load Factor:

Total tickets available for sale, indicates maximum inventory available or max supply  From time to time, airlines in India have raised concerns on the occupancy levels of seats,  that’s passenger load factor.

Mostly the number has hovered between 68% to 72% for most full service airlines & between 75% to 82% for low cost carriers . Assuming 75% PLF for India, total sold out tickets in India per day would be: 2,06,760

Total Seats Offered:  275,680
Passenger Load Factor: 75%
Seats sold: 206,760

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Sale Distribution through Different Channels:

Having said that 206,760 tickets are available for sale, lets not assume that all sale happen through online channels. Different channel includes – Offline Travel Agents & Tour Operators, Tickets sold as part of travel packages, Big Corporate Organizations booking tickets for its employees through offline travel partners, Ticket Counters at airports and yes – Online.

Assuming a healthy 40% of all airline ticket sales as online sales. However, consumers in India are price sensitive and do book directly from airline’s websites as well.

Doing the division
– Ticket Sales on airline websites = 15%
– Ticket Sales on OTA websites = 25%

Tickets sold by OTAs daily = 51690

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So What are Daily Transactional Sales like?

Total Ticket Sold by all OTAs per day =  51690
Assuming average price of ticket sold online at =  Rs. 5000      (not all get a Rs.3000 ticket)
That’s daily sale of Rs. 258,450,000   ->   ie.  Rs. 25.84 crores
Monthly =  775.2 crores
Yearly= 9062.4 crores
Market size for Indian OTA Industry in Domestic Flights:  9000 crores  approximately

On a 5000 INR priced ticket, you pay 2000 INR tax  (that’s 40% ). Hence removing the tax factor, the number will be 5400 crores per year

Figures based on assumptions & numbers used in this post.

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Interesting take aways from this dissection…

  • this could have been extended to predict profitability of an OTA but has been restricted to predicting the market size only. However it’s a volume game!
  • On an average, every aircraft in India does 5.6 flights per day
    If airlines could further manage route optimization and do 1 more flight per day, at 6.6 flights per day, OTA Industry Sales will be up by 15%
  • If an airline adds one more aircraft to its fleet, OTA business increases by 0.4%
    Note that the airlines listed here itself (excluding Air India, Indian Airlines (now part of Air India)) have over  250+ air crafts in orders with Airbus / Boeing and others. This is equivalent to number of aircrafts in operations now.  If market conditions remain positive and airlines accept deliveries of these aircrafts over next 5 years, the market size will be double of existing today!
  • Nevertheless, Online Booking of Tickets will only increase in coming years. This presentation assumes 40% of ticketing happening online, this percentage share will increase with increase in consumer’s likeness for online transactions. The share of online reservations between airlines & OTAs will be deciding factor.

PS: The flow has many assumptions, however if one has or knows the right numbers – logically the market size can be concluded. I feel the numbers I have taken here are little on higher side.

Thank you :-)