redBus, India's
biggest online bus booking service, has launched
hotel reservation feature in its website, as JustDial, an online classifieds service in India, creates online bus booking facility.
This move from redBus comes after eight years of operations and original focus on the huge bus sector. Before redBus the reservation market in India was mostly offline and unstructured.
In the hotel section in redBus site - currently in beta state - users will be able to search for hotels, and sort by price and star rating.
In case of JustDial, a publicly listed company in India, it already lists
car reservation vendors online, and supports car booking online. Now, it has launched
online bus booking feature, and "soon" the company will enable online bookings for flights, hotels and train.
These launches can be seen as signals for the maturity of online travel industry in India, and the increasing number of travellers going online.
According to a recent
comScore report, India leads the chart for highest "reach" in the travel category when compared to Brazil, Russia, and China (BRIC countries). Also, India’s reach of 38% surpasses the worldwide reach of 36%.
Here, "reach" is defined as the % of total user base in the market for a category. For example, 38% reach in the travel category in India means that out of the total population of 74 million internet users in India, some 38% visit travel sites every month.
Is redBus' move a big deal?
redBus sells over one million bus tickets every month. With an
Alexa Rank of 277 in India, being the
eight most visited travel site in India, and a market leading position for bus bookings, redBus certainly has the traffic and customer base to make an impact.
Also, hotels and packages are a hot trend in India that various companies including MakeMyTrip are actively pursuing (
here, and
here).
redBus' first hotel booking came through within the first hour of launch, and that was without making any announcement about the launch.
The goibibo touch
In June 2013, ibibo Group, the company that runs
Goibibo and
TravelBoutiqueOnline,
acquired redBus for an undisclosed amount (it was rumored at
$138 million).
Recently, in March 2014, ibibo Group
acquired India-based online bus tracking and analytics service provider
YourBus, a service that complements redBus' business.
Tnooz spoke to
Ashish Kashyap, CEO of ibibo Group, to understand more about the launch of hotel booking in redBus.
Kashyap told Tnooz that hotel booking need was clearly existing among redBus customers.
According to him, there are four segments of travellers making a bus reservation on redBus:
- Holiday travellers
- Religious travellers (to destinations such as Katra, Shirdi)
- SME business travellers
- Students and executives going back to their hometowns
First three segment of travellers above are very relevant audience who have need for hotels, says Kashyap.
redBus has integrated with ibibo Group's hotel inventory management platform (the one that's used by goibibo hotel customers) -
inGoibibo.com. So, the hotel booking service in redBus is not just a white label solution.
redBus does not have any immediate plans to venture into other travel segments like tours and activities. However, it will shortly launch hotels on the redBus mobile app.
By aiming at tier two and tier three destination hotels, redBus has positioned itself as a competitor to services like
Stayzilla (recently received
Series A fund), an India-based company that focuses mainly on accommodation options in tier two and three cities.
Will other online bus booking players follow suit?
The pnline bus reservation market in India is still maturing. Competitors of redBus in India include
Ticketgoose (
raised $3 million in October 2013),
Travelyaari, and
Abhibus.
Tnooz spoke to
Arun Athiappan, CEO and co-founder of Ticketgoose, to understand his plans for non-bus booking markets.
Ticketgoose is planning to offer hotels to its customers through a tie-up with other third party hotel inventory providers and currently it is in the process of identifying a provider who will be able to offer budget hotel inventory online as most of the bus travel customers are budget conscious, according to Athiappan.
Ticketgoose is planning to go live with budget hotel inventory (across tier one, two and three cities) by the end of June 2014.
When asked Athiappan about the percentage of Ticketgoose customers who are looking for a hotel stay, he says:
"While we don't have an authentic source for this, we feel that 10% to 20% of the customers will have a need for hotel stay."
Tnooz also spoke to Arjun Rao, director of products at Travelyaari. When asked Rao on his take on Travelyaari's hotel booking plan, he says:
"Travelyaari will look at products that are complementary to bus travel consumers, for example, hotels and tour packages, in the future.
"Can't give any timelines for such launches. We're fully concentrating on the core intercity bus travel market, which is in nascent stages itself."