The Scope and Challenges for Indian Travel Startups in 2019

Over the years, many young, budding entrepreneurs have approached me, asking me about the

potential of a new start-up in the travel sector. The figures and statistics certainly point towards a

boom in this industry and it is no surprise that so many young men and woman (women) want a

piece of the pie.

While the signs are positive, one must remember that with opportunities come challenges. Let me

begin with the scope of starting your own travel startup. Here is why the time is indeed rife to

kickstart your own business:

a.) Size of the Indian market: India is the second most populous country in the world. At 1.35 billion

people, the size of the market is immense. In 2017, India generated $210 billion in revenue from

the tourism sector alone which accounted for 9.4% of India’s GDP.

The size and strength of this market makes it aflood with opportunities. The industry is also

becoming stronger as the population spends more money on tourism, ensuring that the time is

rife for budding businessmen.

b.) Demographics: When you analyse Indian demographics, you can see that there’s an upward

trend in the travel industry. In other words, it’s booming right now. 10.4 million individuals

arrived in India from across the world in 2017. As the lifestyle and spending power of Indians

improved over time, 23.94 million Indians travelled abroad. Domestic travel was higher than

ever, with 1652.49 million Indians travelling to other states.

The signs are promising. A travel start-up would thrive in such an environment.

c.) Travel is Becoming a “Lifestyle”: The biggest change travel and tourism, especially in the

younger generation, is the perception of what travel means to them. In addition to a source of

recreation and a means to unwind, travel is now seen as a mode of soul searching, of finding

oneself and of broadening one’s horizons. Travel has gone from what was once a luxury, to a

lifestyle choice. It is an experience that helps one grow and mature, to discover themselves.

d.) Penetration of technology: People from all walks of life now have access to the internet

through mobile devices, laptops and tablets. The travel industry has benefitted exponentially

from this boom because this has not only exposed travellers to new, exotic locations but also

allowed travel agencies to connect with their customers. The increased reach has allowed the

travel industry to grow by leaps and bounds.

However, there are challenges that a travel startup may encounter. It makes sense to be ready

for them if you decide to tread down this path:

1.) Competitive pricing from Big Players: Established travel businesses can present competitive

rates to a customer that a start-up may not be able to match at least during its initial phase.

It is because of this reason that a lot of start-ups take massive financial hits from the very

beginning.

2.) Marketing costs: The cost of marketing in the realm of ‘tours and travels’ is significantly

more expensive than almost any other domain. Established players have access to important

adwords that are integral to marketing that start-ups may not be able to afford because of

the costs involved. And unless you’re spending on marketing, there’s no way for a new

player to get noticed by their prospective customers.

3.) Window shopping: While many start-up travel businesses may have interested parties

knocking on their doors to find out about prospective travel deals, the customer may decide

to go with an established party in the end. This is because of the spotless track record of the

bigger, far more established OTA business.

4.) Lack of uniqueness: In my estimation, few new businesses are unique when it comes to

solving issues that customers may potentially face. In other words, instead of trying to solve

existing customer problems, they may seek out problems to retrofit solutions into. Your

product needs to stand out from the multitude of options available for customers to choose

it over every competitor in the already crowded marketplace.

Don’t let these challenges discourage you. A little caution can go a long way. Once you weather out

the initial storm, the market is promising and rife for the picking. Best of luck to any aspiring

entrepreneur who wants to make a name in this field.