Sunday, July 26, 2009

PWYW: A New Pricing Model in Indian Online Travel Industry

What is PWYW?

PWYW, Pay What You Want, is an innovative pricing model in the revenue/yield management arena. In online travel space this model was first used by (a leading online travel agent in the US), where it finds a supplier/product (flight, hotel room, etc.) that match customer’s price bid; without naming a provider.

This model allows the customer to purchase a product or service at a price what he thinks is reasonable.

How it is important in Indian context?

One of the key reasons for relatively less penetration of online hotel bookings in the country is psyche of Indian traveler. Behavior of Indian traveler is quite different when he makes purchase of an air ticket and a hotel room night. Unlike purchase of air ticket, Indian traveler always looks for bargain opportunities while purchasing/booking a room night.

How it is beneficial for supplier?

An empty room is a permanent revenue loss for a hotel which can never be recovered. In such cases, something is better than nothing; it is better to sell the room at discounted price than keeping it unoccupied.

A business like hotel, where there is high fixed cost, low marginal cost and perishable nature of the product, if there is additional capacity which is inexpensive to serve, volume gains always increases profitability. For e.g.; For a hotel, costs of receptionist, room service staff, front office staff and support staff remains same irrespective of the volume of room nights sold. In such cases, it is always profitable to increase volume of sales in order to reduce variable cost per available room and to reduce revenue loss from unoccupied rooms.

Moreover, PWYW model also increases customer satisfaction as he perceives transparency and fairness in pricing which in turn generates repeat business.

What if customer quotes zero price?

The most common argument against PWYW model is, what if customer quotes zero price? Researches have shown that in a case where customers are asked to quote their own price for any product (which they actually intend to purchase), they always quote fair and non-zero price.

Who is practicing it in India?

This pricing model is relatively new in the Indian online travel market. Recently two online portals, Bid2Travel and At Your Price have adopted PWYW pricing model. These websites allow travelers to submit their quote/bid for a hotel room or air ticket. Upon submission of bid, website instantly confirms availability of provider matching his bid and consummates the sale.

With increasing competition in the online travel space, marketers need to look at alternate pricing model like PWYW for survival. Not just OTAs, hotels and restaurants can also look at implementing or testing such pricing model.

Saturday, July 25, 2009

List of Travel Meta-search Engines

Below is the list of travel meta-search players in India. Feel free to add to the list in case I have missed on any names:

Meta-search Engine










Redifff Faresearch

Yahoo Faresearch

Ghoomo (at your price)




Friday, July 24, 2009

List of Online Travel Agents (OTAs) in India

Please find below list of Online Travel Portals in India. Please note that in this list, I have included only third-party travel websites that provide online booking facility on their websites. Hence, I have excluded supplier websites (airline, hotel, etc.) and meta-search players (iXiGo). Feel free to add to the list.

Online Travel Agency















Via World (Flightraja)



Airtickets India

Indiatimes Travel



Red Bus


Travel Bixee

Thomas Cook

Cox & Kings



Cheap Air Tickets

Take off Trip

Prime Travel India

Travel Mart



Me Go

Journey Mart

STA Travel

Thursday, July 23, 2009

Now you can buy rail ticket from post office

If you think that @12 in the mid-night i am dreaming about making my train ticket booking from a post office next door, then you are mistaken because it is a dream come true for me...

As a part of the revamp plan of Indian Post Services, it has decided to offer various value-added products and services at post offices which would include train, flight and bus reservations, foreign exchange, gold coins, stationary and gift items.

In a short time span from now, more than 400 post offices in Andhra Pradesh would start offering ticket booking services for rail, airline and bus. As per officials from Indian Post, over the period this model would be replicated in more than 1,000 post offices across the country.

What and idea ? ? ? generated INR 3 Billion revenues for domesetic airline industry

One of the most prominent travel meta-search player iXiGo generated direct airline sales of INR 300 crores and helped airlines to save distribution costs up to INR 15 crores. In addition to this, as bookings were made on airline's own website, iXiGo has also enabled airline partners generate ancillary revenues of almost INR 5 crores.

According to Mr. Aloke Bajpai, Founder and CEO of, "Distribution costs form the third biggest expense item on the P&Ls of airlines in India after fuel & personnel expenses. The data points we have aggregated suggest that the meta-search model's growth in India is reducing distribution costs through efficient online customer acquisition, at a fraction of existing distribution channels, and is helping accelerate ancillary revenue generation"

iXiGo provides unbiased results for the search query and enables the user to compare the results. It also saves commission and booking fees for travelers as they remove middleman from the channel by routing the bookings directly to the airline website.

With entry of more meta-search players, distribution space in the online travel industry has become more competitive.

Source: Business Wire India (