This report includes market sizing, growth opportunities and customer segmentation of the Online travel market in India for domestic flights, international flights and hotels.

1. Build together
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Flying high: Online Travel
11th April, 2018

2. Context and Summary
2© Praxis Global Alliance |
• This document is an extract from our work in Indian Travel Industry.
• With this document, we aim to give an insight into the overall and online travel industry, its size and
direction.
• As a part of the study, we did extensive research on the travel industry through primary and
secondary interviews, surveys and research across
• Different segments in the travel market (Air, hotels, bus)
• Different geographies (India, Middle-east and South Africa)
• Online and offline players
• Intermediaries and their incentives

3. 25 24
26
31 31
36
40
43
47
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Travel and tourism direct contribution to GDP
(USD B)
Indian travel and tourism industry (USD 47B in 2016E) is growing at a CAGR of 10%;
expected to reach ~USD 74B by 2021
3© Praxis Global Alliance |Source: World Travel and Tourism Council’s Economic Impact 2015, IMF, Praxis analysis
Travel and tourism industry in India is growing at a CAGR of
8% and reached USD 43B in 2014
Travel and tourism industry is projected to grow to ~USD
73.6B by 2021
8%
CAGR
2.02% 1.87% 1.97%2.08% 1.97% 1.70% 2.15%
As a % of
Nominal
GDP
2.11%
10%
CAGR
2.08%
1,201 , 25
1,187 , 24
1,324 , 26
1,657 , 31
1,823 , 31
1,828 , 36
1,857 , 40
2,035 , 43
2,112 , 45
0
10
20
30
40
50
60
70
80
90
- 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000
TravelandTourismdirectcontributiontoGDP(USD
B)
Nominal GDP of India (USD B)
Regression between T&T and Nominal GDP
73.6
USD 3,560 B as projected
by IMF for 2021
2021P
R2 = 0.89
Implies ~9.5% 2016-21 CAGR

4. Indian T&T is riding a secular growth wave, driven by growing affluence and growing
spend share for travel; rooms, flights growing @15-17% CAGR
4© Praxis Global Alliance |Source: Census, 2011, Statista, Praxis analysis
Consumer share of wallet on travel is
increasing
# rooms and flights booked in India are growing
at CAGRs of 15% and 17% respectively
5.0 5.9
7.0
8.6
9.9 10.9 11.4
2010 2011 2012 2013 2014 2015 2016
No of hotel rooms in India (MM)
52.7 61.4 67.4
81.1
99.9
113.3
2012 2013 2014 2015 2016 2017P
No of domestic flights booked (MM)
2%
3% 3%
4%
2005 2010 2015 2020E
Spend on travel as a percentage of wallet spend
Demand factors Supply factors
15%
CAGR
17%
CAGR

5. Online travel (air + hotels) in India is expected to grow to USD 13.6B by 2021 (~16%
2015-21P CAGR) driven by growth in penetration in intl flights and hotels
5© Praxis Global Alliance |Source: TA interviews (N=95), Expert interviews, Secondary research, Praxis Travel Market Model; Praxis analysis
2.66
5.71
13.6
2012 2015 2021P
Online travel penetration
(Air + Hotels), USD B
1.3
2.7
6
2012 2015 2021P
Online travel penetration
(Air: Domestic), USD B
0.76
1.01
2
2012 2015 2021P
Online travel penetration
(Air: International), USD B
0.6
2
5.6
2012 2015 2021P
Online travel penetration
(Hotels), USD B
29%
CAGR
16%
CAGR
27%
CAGR
9%
CAGR
49%
CAGR
15%
CAGR
12%
CAGR 19%
CAGR
Overall online travel
bookings are expected to
increase at a CAGR of 16%
Domestic flights: Online
penetration saturated (2015-
21P CAGR of ~15%)
Intl flights: Online bookings
for intl flights are expected
to grow faster than history
Hotels: Online penetration is
expected to grow by 19% by
2021 as hotels get online
23% 35% 43%
Online
travel (as a
% of total
travel
category)
35% 50% 51% 25% ~30% ~40% 13% 27% 37%
Note: Hotel included branded hotels and budget hotels; Does not include campsites, dharamshalas (community lodging), B&Bs/Home-stays
28%
CAGR
26%
CAGR

6. Globally, Online travel penetration tapers around ~50-52% levels as internet
penetration saturates and some segments are slower in moving online
6© Praxis Global Alliance |Source: IATA, PhocusWright (2016), Praxis analysis
44%
47%
50%
52%
44% 45% 45% 45%
27%
31%
34%
37%
23%
28%
31%
34%
2014 2015 2016 2017
Online Travel Penetration, Global markets
Europe
U.S. and Canada
APAC
Eastern Europe
OTA penetration in mature markets like USA and
Europe have tapered for developing markets
Mature markets
Online travel
penetration tends to
stabilize after 45-
52% levels
43%
49%
59%
62%
65%
68% 69%
75% 74%
71% 72% 70%
75%
71% 73% 75% 76%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Online penetration in USA (as a % of total
population)
Onlinepenetrationis
saturatinginUSA
Hotelsaremuch
slowerinmoving
online
55%
8%
14%
Air (flights) Hotels
Online travel penetration in segments
(OTA+direct website)
Stabilising
penetration
rates
Direct
website
OTA

7. Domestic flights: ~70% of online bookings in 2021E is expected to come from
individuals and SMEs; major increment (2015-21E) would be due to large corporates
7© Praxis Global Alliance |Source: TA interviews (N=95), Praxis Travel Market Model, Praxis Analysis
Corporates -
SMEs, 49.0% 46.0%
Individuals,
24.0% 24.0%
Large corporates, 16.0% 18.0%
HNIs, 5.0% 6%
Groups, 6% 6.0%
2015 2021E
Online bookings by each customer segment (as a
% of total online bookings in domestic flights)
16%
15%
18%
18%
19%
2015-21E
CAGR
~$2.6 B ~$6.3 B

8. Intl flights: ~67% of online bookings in 2021E is expected to come from individuals
and SMEs; major increment (2015-21E) would be due to other segments
8© Praxis Global Alliance |Source: TA interviews (N=95), Praxis Travel Market Model, Praxis Analysis
Individuals,
45% 41%
Corporates -
SMEs, 23% 26%
Groups, 15% 13%
Large
corporates,
12%
14%
HNIs, 5% 6%
2015 2021E
Online bookings by each customer segment (as a
% of total online bookings in intl flights)
10%
10%
14%
14%
14%
2015-21E
CAGR
~$1 B ~$2 B

9. Hotels: ~86% of online bookings in 2021E is expected to come from individuals and
SMEs; major increment (2015-21E) would be due to online group bookings
9© Praxis Global Alliance |Source: TA interviews (N=95), Praxis Travel Market Model, Praxis Analysis
Corporates -
SMEs, 62% 61%
Individuals,
22%
25%
Large corporates, 11% 8%
HNIs, 3% 3%
Groups, 2% 3%
2015 2021E
Online bookings by each customer segment (as a
% of total online bookings in hotels)
16%
14%
8%
16%
22%
2015-21E
CAGR
~$2 B ~$4.3 B

10. Key questions for travel players
10© Praxis Global Alliance |
1. In the face of impending consolidation, which players will lead the travel market?
2. How will the position of offline players like consolidators, Travel Mgmt Companies and tour operators be
affected due to the existence and growth of OTAs and online aggregators?
3. Considering that the online penetration tapers off at 50-52% levels, how would the Offline players need to adapt
to stay in the game?
4. As a result of changes in distribution of tickets and bookings, how are the flight and hotel take rates and
distribution costs expected to change? Does it make it easier for large hotels to go direct?
5. Given the fragmented hotel market across countries, what country-wise content customization would be
required to suit the needs of international travelers?
6. How is the customer purchase and experience journey changing? How can OTAs adapt to it especially as voice
search takes off?
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