• Online Travel Agency (OTA) is a web-based marketplace that allows consumers to research and book travel products and services, including hotels, flights, cars, tours, cruises, activities and more, directly with travel suppliers. Every day, millions of travelers around the world use OTAs to plan leisure and business travel.
• The Indian OTA industry increased from a gross booking revenue of ₹ 284 billion in 2015 to ₹ 978 billion in Fiscal 2020, registering an impressive CAGR of 28% during the same period. COVID slumped the growth in Fiscal 2021, especially on account of the slow revival of international passenger traffic as well as a decrease in the market size of the hotel industry.
• However, the OTA industry is expected to bounce back due to pent up demand and accelerate especially in rail and bus segments, reaching ₹ 1,782 billion in the year 2024, with a CAGR of 16% for the forecast period. The growth of the OTA market is expected to be even faster than the overall online market.

Segmentation Within the Overall Indian OTA Industry:

• Airlines: Airlines have lost their dominance in terms of revenue contribution in the ticketing segment for OTAs. In Fiscal 2020, for the OTA industry, as represented by top 3 listed players, airlines contributed less net revenues than hospitality. Though still accounting for over 65% of gross booking values, and increasing in volume of transactions, the declining margins to just 8% are reducing the overall contribution of this segment in revenue share. As a result, OTAs have been shifting focus to other higher-margin segments like hospitality and bus modes. 
  
• Hotel : The share of hospitality in the OTA industry is increasing both in terms of value and volume. Hotel bookings contributed 44% of all net revenues in Fiscal 2020. It is the next frontier of competition for all OTAs in India as its one of the two fastest growing online travel segments with a CAGR in the forecast period in excess of 20%.
• Rail: The volume of railway ticket booking through OTAs however has been rising significantly as their penetration into tier-II & III cities increase. Most OTAs are entering the Rail segment to extend their product offering to a full stack and explore the untapped potential of this segment.
• Bus: The Bus segment is highly underpenetrated by OTAs and represents an increasing segment in terms of volume. Bus  is the fastest growing online travel segment, with a forecasted CAGR for 2021-24 more than 25%.

• The overall travel market in India has strong industry fundamentals and is expected to grow 7% till 2025. The prospects of online travel growth are even stronger at 12% in the next 5 years given the internet and smartphone penetration, exponential growth in digital payment, shifting traveler demographics and nature of the evolving Indian traveler.
• The OTA industry is expected to ride the wave of digitization of Indian travel, and is expected to grow at 15% for the next four years, double that of the economic growth of the country. This growth will be led by OTA growth in hospitality and buses segments which have a projected CAGR forecasted at over 20-25% until 2024. Volume growth is expected from railways as OTAs tap the huge unreserved segment of the rail sector.

• Under the UDAN scheme for airlines, in the last 5 years, almost 35 airports have become functional. The National Rail Plan 2030 announced an increase in railway tracks and the introduction of some new AC chair car trains. However, the budgetary outlay and progress by the Ministry of Road and Transport to construct 65,000 kms of national highways has been substantial.
• Swadesh Darshan: This scheme was launched by the government to promote the development of theme-based circuits, such as the Himalayan Circuit, Coastal Circuit, and Buddhist Circuit. ₹ 60,357 mn has been sanctioned under this scheme for 77 projects.
• The Pilgrimage Rejuvenation and Spiritual Augmentation Drive (PRASHAD): was introduced to focus on developing pilgrimage destinations. For this purpose, 58 destinations have been identified in all states.