deflationary effect

The internet’s deflationary effect is felt on every industry it touches – starting right from the financial services, travel, transportation, printing & publishing, telecom, media & entertainment and a host of other industries. Some airline operations are case studies for extrapolation beyond the aviation industry. Imagine southwest without these technology applications . Look at new features like this – it is clear the airline industry is on the verge of massive change.Looking at the airline industry, the first air ticket was sold via the Internet almost 10 years ago, in December 1995, by Alaska Airlines – just ten years back. Contentsutra points to Agencyfaq story ( reproduced from Economictimes – am not able to see the link to the article in ET site in my quick search), that travel has been the most popular e-commerce category. In the US, net-based ticketing accounts for 90 per cent of the total travel-related transactions. In India too, net ticketing is gaining ground with 25 per cent of the total transactions being conducted online. The data of distribution amongst various travel modes would be more interesting to read. E-tourism is fast gaining foothold in the Indian market with close to 25% of the travel business being conducted through the internet, according to industry estimates. Industry analysts feel e-tourism may contribute 50-60% of the travel business in India in the next five years. Leading travel and tour operators such as Thomas Cook and Stic Travels provide a wide gamut of online services. Right from travel information and flight schedules, hotel room availability to booking tickets, rooms, car rentals and even purchasing travel insurance products as well as foreign exchange can now be done online. There are many other travel sites, however, that act as only information windows of the services and package deals offered by the travel agency, instead of providing real-time reservation services. The recently released UNCTAD report points to an interesting fact that since most information on tourism opportunities in India for foreign inbound tourists is generated, updated and marketed online by major international service providers based in developed countries, these providers end up absorbing as much as 40% of the total profits in the tourism industry. The upside is very high for the fast growing Indian travel market. So much so Karat narrates a conversation with a VC, who promises a major investment in the online booking space in India shortly. Let a lot more of such services bloom – let some trendsetting portals be launched – let a few of them aim to be worldbeaters. From railaway reservation portals launched a few years back to where things are today – this is indeed a good growth – but the space above the top is much bigger. Slowly we are seeing the emergence of the face of New India.

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