Indian Bus industry to achieve value of Rs 104,000 crore in 2026: Traveltech 2.0 

The surface transportation services like bus and rail travel has huge potential for OTA service providers who offer value added services to their customers in addition to basic online ticketing.

Autocar Pro News Desk By Autocar Pro News Desk calendar 28 Feb 2024 Views icon3182 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
Indian Bus industry to achieve value of Rs 104,000 crore in 2026: Traveltech 2.0 

The bus industry in India is experiencing significant growth, with projections indicating a substantial increase in value by 2026. According to the report "Traveltech 2.0: The Next Phase of Digitally Empowering the Indian Traveler," jointly produced by the IAMAI and Grant Thornton Bharat, the industry is expected to achieve a value of Rs 104,000 crores by 2026, with a compound annual growth rate (CAGR) of 6.64 per cent. This growth is driven by both State Transport Undertakings (STUs) and private buses, with STUs expected to grow at a CAGR of 6.36 % and private buses at 7.37%.

The report highlights the emergence of online ticketing as a growing trend among bus travellers, although non-AC and intra-city bus ticketing remain predominantly offline. However, there is significant interest and uptake for online ticketing and value-added services, especially among travellers in major cities. Value-added services such as live bus tracking and digital ticketing are becoming increasingly common in city buses, presenting opportunities for private sector involvement.

In addition to the bus industry, the report also addresses the potential for OTAs in the Indian railways sector. Despite restrictions on online ticketing for private players, there is considerable opportunity for OTAs to innovate and collaborate with the Indian Railways, particularly in the reserved ticketing segment. The shift to digital ticketing not only benefits the Indian Railways in terms of operational efficiency but also offers OTAs opportunities to enhance user convenience and innovate tariff structures.

With unreserved passengers constituting a substantial portion of the total passenger count, collaboration between CRIS and private OTAs emerges as a transformative opportunity. The shift to digital ticketing not only reduces operational burdens for the Indian Railways but also offers private OTAs an avenue to innovate tariff structures and enhance user convenience. This synergy holds the potential to elevate the passenger experience, alleviate infrastructure strain, and foster a symbiotic relationship, yielding efficiency gains for the railway system and expanded market opportunities for the private sector.

“Technology is revolutionising the way we travel, making it easier to use than ever before. Chalo is thrilled to support the publication of the Travel Tech report. I'm confident that it will spark meaningful conversations and shape positive policies that will ensure that we leverage technology in the best possible way to make city bus travel better,” said Dhruv Chopra Co-founder and CMO, Chalo, speaking at the launching of the report at the India Digital Summit 2024 on February 28.

Commenting on the launch of the report Aloke Bajpai, Chairman, Managing Director and Group CEO, ixigo said "Railways and buses are revolutionizing the ground transport segment in India. With infrastructure development, increased internet penetration, modernisation, and improvement in service quality with OTA-driven tech upgrades, this segment is poised for further growth. By leveraging technology, OTAs are empowering travelers to make smarter travel decisions, and are playing a leading role in driving online adoption in the ground travel sector."

“The next evolution of travel tech will happen as we unlock the full potential of OTAs in the ground transport business. That's the key message from the IAMAI Travel Tech report. It is important to remove tax disparities between e-commerce operators and e-commerce suppliers in the domestic market. Currently, a customer pays a 5% GST charge when booking a non-AC bus through an e-commerce platform. This charge is zero for a direct booking from a bus operator, irrespective of whether it is done in online or offline mode,” said, Prakash Sangam, CEO, Redbus

Addressing the same session Vikash Jalan, Chief Business Officer, PayTM Travel, commented, "The new IAMAI Travel Tech Report explores the role of technology in shaping India's travel landscape, highlighting the impact of OTAs on ground transportation and calling for collaboration to bridge the digital divide and unlock the full potential of travel technology."

Key industry players, including Chalo, ixigo, Redbus, and PayTM Travel, have expressed optimism about the role of technology in driving growth and improving the travel experience in India. They emphasize the importance of leveraging technology to empower travelers, drive online adoption, and bridge the digital divide in ground transportation.

Furthermore, stakeholders have called for policy changes to address tax disparities between e-commerce operators and suppliers in the domestic market. This includes reconsidering GST charges for bookings made through e-commerce platforms compared to direct bookings from bus operators, regardless of whether they are conducted online or offline.

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