26/03/2025 by WiT
Except for rail, OTAs dominate all major travel segments – air, hotels, and intercity buses – accounting for over 70% of online Gross Booking Value (GBV)
In FY24, India’s Online Travel Agency (OTA) market is estimated at $14.5 billion (₹1,20,000 crores), representing nearly two-thirds of the country’s online travel market. VIDEC Consultants, an India-based travel research and M&A advisory firm, has released insights from its latest VIDEC’s India Travel Market Opportunity, FY22-FY27 study.
Founded in 2016, VIDEC is a boutique research, consulting, and M&A advisory company with a singular domain focus on the global travel, tourism, and hospitality industry.
VIDEC undertook independent, rigorous and unbiased research covering air, hotel, alternate accommodations, rail and intercity bus categories, with an emphasis on Indian outbound and the role of online travel intermediaries. The research employs a complex demand-side methodology to accurately assess the true potential of India’s travel market.
According to the report, India’s total travel market was valued at US$56.3 billion (₹464,954 Crores) in FY24, up 14.4% compared to FY23. The growth looks a bit muted in USD because of depreciation of Rupee. The total travel market is projected to reach $78.4 billion by FY27.
Air was the dominant category, accounting for nearly half of India’s total travel market in FY24 at a GBV of $27.5 billion. The hotel market claimed a quarter of the share and two ground categories, rail and intercity bus, accounted for the remaining. VIDEC conducted the first-ever market sizing of India’s alternate accommodation category. India’s alternate accommodation market was valued at $1.8 billion (₹15,000 crores) in FY24 and is projected to grow a stellar CAGR of 34.1%, to reach $4.2 billion by FY27.
India’s Online Travel Agencies (OTAs) have a distinct make-up, with MakeMyTrip Group being the only full-service OTA, operating across all travel segments. Cleartrip and EaseMyTrip primarily focus on air travel, while ixigo Group dominates the rail segment. Yatra, on the other hand, has a strong corporate travel focus. As a result, their Gross Booking Value (GBV) and revenue performance vary significantly.
The key findings from the study are:
- MakeMyTrip, Cleartrip, and ixigo—the top three India-based OTAs by GBV—outpaced the overall OTA market growth of 22% in FY24, gaining market share.
- India’s burgeoning OTA landscape remains vibrant, with NASDAQ-listed MakeMyTrip Group again emerging as the undisputed market leader. The OTA behemoth leads in three out of four major travel categories – air, hotel, and intercity bus travel, accounting for a 55.3% share of the total OTA gross booking value (GBV) in FY24 at $8 billion in GBV.
- Flipkart-owned Cleartrip has held on to its last year’s lead as the second-largest OTA in terms of GBV. Cleartrip clocked a GBV of $1.3 billion in FY24.
- ixigo is now the fastest-growing India-based OTA and the second-largest in terms of revenue since 2022. ixigo accounted for 8.6% of the OTA GBV at $1.2 billion and led the third-party rail travel distribution.
The report highlights that OTAs have been the driving force behind online travel expansion and have a dominant position in two highly fragmented travel categories—hotels and intercity buses—where they now command nearly 90% of the online market.
Commenting on the key trends, Virendra Jain, CEO and co-founder of VIDEC, said, “We strongly believe in the Indian travel market opportunity and remain bullish on the significant role of online travel intermediaries. The Indian OTA space is fiercely competitive, with new disruptors constantly emerging. In 2024, India led the world in IPOs, with the travel sector actively participating—bringing liquidity, compliance, and an eye for forward looking guidance. This is evident as OTAs expand beyond their core categories into B2B and corporate travel, moving beyond leisure. Today, revenue performance is as crucial as GBV, and MakeMyTrip’s diversified non-air portfolio has also positioned it as the OTA leader by revenue margin. At VIDEC, we are committed to cutting through the noise with empirical insights. Our deep expertise and ongoing coverage of the Indian travel market has helped us benchmark the current OTA pecking order and market projections.”
The margins in air generally hover between mid to high single digits while the same for hotels is in teens. Both EaseMyTrip and Yatra’s revenue margins are reflective of their air heavy GBV contribution. MakeMyTrip on the other hand, has consistently outperformed its peers in revenue margins, with over half of its revenue coming from hotels, although air category continues to account for more than half of its GBV.
The report also explains that the OTA business is capital-intensive, requiring massive investment in brand building and customer acquisition. A robust customer engagement strategy is key to foster user stickiness and retention. As India is a price sensitive market, discounting and cashbacks are prerequisites for driving OTA topline. This is evident as OTAs often pass back a third to half of their revenues to customers. Amidst all this, ixigo has stood out with its judicious approach, achieving strong revenue performance through its fintech attachments and ability to cross sell travel alternatives to its ground-first, native users. Meanwhile, Cleartrip, the second-largest Indian OTA by GBV, has relied heavily on aggressive discounting and costly customer acquisition strategies.
This article is part of a series focusing on OTAs in Middle East & India travel markets, written by Virendra Jain. He will be headlining a session called ‘Uncovering The Middle East Travel Market’ at WiT Phocuswright Middle East on April 25, 2025. The session aims to be a critical analysis of the Middle East travel market, while highlighting recent developments in the hospitality and travel industry as well as some key trends on the regions suppliers and intermediary nuances.
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