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TECH VERTICALS

Avenues For Travel-related Services To
Transact On The Internet

SIBABRATA
DAS

MUMBAI:  Vishwas Patel had entered
the Internet business right in the midst of the bust. Venture
capital funding had almost evaporated and revenue models had become
a big question mark.

All this however did not concern Mr Patel. He had gathered
enough expertise about the way the Internet was being used to
leverage business, during his visit to Europe. In London, he had
seen pizzas being delivered on orders given over the Net. It was, he
felt, too strong a medium to just disappear.

Hailing from a real estate business background, he
had already started a chain of Indian ethnic garment retail stores
under the ‘Seasons’ brand name. He was convinced that the Internet
could be used by a community of merchants if a complete transaction
model could be built into the system.

In September 2001, Mr Patel launched CCAvenue, an
online payment gateway solution company. The aim was to provide
turnkey e-commerce solutions to merchants across India. Though
business was initially slow, Mr Patel claims to have roped in 1,500
customers including the Union Ministry of Information &
Technology, Tatas and Mahindras.

“We did transactions worth Rs 65 crore last year,”
he said.

However Mr Patel is not satisfied and has bigger
plans up his sleeves. To grow faster, Mr Patel has decided to create
verticals that will ramp up transactions through the gateway. His
experience in managing a host of e-merchants could be of help.

“Payment gateway is the backend. We will focus on
different sectors to drive business into the system,” he says.

ResAvenue, an Internet hotel reservation system,
has already been launched.

Next on the cards is CineAvenue, an avenue aimed at
easing the problem of ticket availibility in cinema halls. Having
created a payment system, customers for different services would be
offered a complete transaction option.

Apart from all this, Mr Patel is of the opinion
that there is a lot of scope for the online hotel reservation
business also.

“The international trend is encouraging. Nearly 52
per cent of e-commerce globally is travel-related. Hotels play a
major part in this. Last year, 20 per cent of hotel inventories
worth $14 billion were bought online”, he says.

Though India is nowhere in the picture, Mr Patel
feels that the Indian hotel industry should go online.

“Agents get as high as 30-40 percent commission.
Hotels can brush aside the existing distribution channel if they
launch online reservation of their rooms. By reducing dependency on
traditional distribution channels, hotels can save costs. It will
also give them direct access to the customer and customer loyalty
can be built through direct interactions,” says Mr Patel.

He feels this is particularly significant
considering that hotel inventory (rooms) is highly perishable.

ResAvenue provides a traditional distribution route
as well and has created an agent logon. The agent is given a user
name and password. Pre-negotiated contract rates with hotels are fed
into the system and customers can be booked through that route.
There is also a corporate logon not available for ordinary
customers.

To book rooms, customers can visit individual hotel
websites, view the rooms, and click on the reservation link. This
will take them to the ResAvenue hotel reservation system. The
customers can view rates and room descriptions in 10 major
international languages. The rooms available are displayed once the
dates chosen are entered.

Customers are then required to enter their credit
card details to pay the amount online. They receive a voucher via
e-mail, confirming their reservation. ResAvenues sends the booking
to the hotel by fax, email and also SMS.

The entire operation is hosted and maintained by
ResAvenue. Hotels will have to pay a set-up cost for the complete
solution, ranging between Rs 10,000-20,000.

“Everything is done on our server. Hotels will not
have to invest in application servers and infrastructure, which can
cost as much as Rs 2.5-3 crore,” said Mr Patel.

Although many hotels have their own websites,
customers can’t complete a booking transaction as there is no online
payment option. ResAvenue offers hotels the online booking engine
solution. Customers can book rooms by first visiting the websites of
the hotels from where they are put on to the ResAvenue server. The
booking and money transaction process is completed in three minutes.

The catch is that hotel websites may not be as
popular as some travel sites. So why will hotels use the ResAvenue
system when they can’t attract traffic directly to their websites?
Mr Patel believes that customer related services would drive traffic
to the individual hotel websites. Besides, individual websites can
give more details on their rooms and offer best rates. The danger in
third party websites is that may give preference to hotels that
offer higher commission.

ResAvenue has an online multi-currency payment
gateway built-in. It offers a complete bouquet of payment options
including six credit cards (MasterCard, VISA, American Express,
Diners Club International, JCB Cards and Citibank eCard) and also
gives direct debit facilities to 10 major Indian netbanking
interfaces. Of the four per cent charge per transaction, ResAvenue
has to share it with the credit card provider and the acquiring
bank.

A multi-lingual reservation process in 10
international languages and Hindi has also been introduced. “We are
increasing it to 20 international languages. We will also offer more
Indian languages,” adds Mr Patel.

The company has also set up subsidiary units in
Singapore and Hong Kong. “We are in a position to offer transaction
facilities in US dollars, pound and euro. That covers a large part
of the world market. We do not charge any currency conversion fee,”
he says.

However the main challenge for ResAvenue is to
encourage hotels to introduce this online system in their day-to-day
transactions.

But, Mr Patel is confident. “Hotel Leelaventure’s
three properties have already gone live with ResAvenue in January.
While we are talking to 18 other big hotels and expect the trend to
catch on.”

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