Will Mauritius-Based Fund Dethrone Cleartrip as No. 3 OTA with Goomo?
Goomo, a Mumbai based omni channel travel tech startup raised 50 million dollars to enter the OTA market in India. The investment comes from Emerging India, a Mauritius based fund manager with over 1.5 billion dollars under management. With all the promise of India’s travel and hospitality sector, it has come into an investor’s sharp focus. In fact travel and tourism is among the top 10 sectors in India to attract FDIs.
But the story goes a little deeper than that. The particular fund had put in an undisclosed amount to buy a majority stake in the travel company called Orbit Corporate and Leisure Tours. Now under the new majority owner’s purview together with the leadership of Orbit, the company will be shifting to a hybrid model with Orbit as the offline travel brand and Goomo as the online travel brand leveraging what’s commonly referred to as travel tech.
Varun Gupta, CEO of Goomo discusses why travel tech for consumers became an inevitable choice for the company that hitherto had a niche for itself in the trade fairs segment with over 40 percent of market share. Under this new brand Goomo, they now aim to enter the B2C space with its omni-channel approach and be among the top 3 players in the next 5 years in India.
What is your view of the Indian travel business and future of OTA’s (online travel agents)?
India’s travel and tourism industry is expected to grow by 11-11.5 percent per year to reach 48 billion dollars by 2020 according to the Boston Consulting Group (BCG) and Google India. In addition the tourism and hospitality segment’s contribution to GDP is expected to grow at CAGR 10.1 percent with India expected to be ranked among the top five business travel markets globally by 2030. Business travel spending in the country is expected to treble until 2030 from 30 billion dollar in 2015.
With infrastructure improvement and better connectivity, inbound traffic will also see significant traction in the coming years.
When it comes to OTA’s, these will continue to play a major role in the travel segment across the globe and India is no exception to that trend. They will leverage technology heavily to create products that will address evolving customer needs in the travel segment. The consolidation has already started in the OTA space and we will continue to see that trend with the smaller and non-differentiated players.
Your company has been in business for 27 years. Yet only in June 2017 did it announce the private equity funding for 50 million dollars, after the Goomo platform was launched in 2015. What’s Goomo’s strategy here on?
Goomo’s strategy is to be among the top 3 players in India in the next 5 years. [Right now the top 3 players are MakeMyTrip, Yatra and Cleartrip respectively].
At Goomo, we believe that no one should miss a single opportunity to travel. Over the next 12-18 months, our focus remains on building great products, a full portfolio of travel choices for Indian travelers, supported by great distribution.
We are already present online and in 14 cities through our own stores. With Orbit Goomo, we have a good presence in Trade Fairs and MICE segment. We also distribute products to a large number of travel agents and retail distributors through our B2B partners. We achieved this in a short span of less than 18 months of operations.
Our medium term focus is to build on this platform and selectively evaluate acquisition opportunities where they make sense.
How will Goomo’s omni-channel strategy help it create a sustainable business?
Traditionally, the OTA industry has segmented consumers as either offline or online and focused on pushing all products through a uniform journey online.
Our belief is that customers are not online or offline but switch between channels depending upon their needs.
Goomo is perhaps the first travel company in India that is being built to be an omni-channel travel tech platform. In today’s competitive environment, we believe it is imperative to be present where the customers are, i.e. online and offline. We will be there to serve our customers in whichever format they are comfortable with to make the transaction. We believe that this will set Goomo’s offerings apart in the market and create a strong differentiation vis a vis competition.
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