Shivani Muthanna, CNBC-TV18

Two years ago - online travel was a sunrise business in India with as many as five large travel portals being launched with a big bang. But the sun seems to have set on this sector on account of a slowdown in the aviation industry.

Under the weather - that's what business has been for travel portals like cleartrip.com and makemytrip.com these past few months. The reason is because air ticketing, which comprises 60% to 70% of their business, is facing a severe slowdown. Add to that the fact that commissions are crashing. They are down from 7% in 2001 to 5% in 2005, to possibly zero by October this year.

Sandeep Murthy, Chairman, Cleartrip.com, “We have to now build an Open Travel Alliance or, OTA based on zero percent commissions, which is what we are doing right now. We have a larger focus on our hotel product.”

Cleartrip is not alone; leading travel portals like yatra, travelguru and makemytrip are headed the same way. All this is because commissions for hotel bookings range between 8% to 25%. This move to shore up bottomlines, has resulted in a major cross-selling of products.

Nalini Gupta, President and Head of Travel Business at Thomas Cook said, “What we need to do is create a larger customer base to get the kind of bottom line that we did before.” 

So they are offering hotel deals with air tickets, free airport transport and even free meal and fuel vouchers to survive. And some players have even taken a step back and are now betting on the offline model to sail past these tough times.

So online portals offering physical kiosks to provide rail, air and even bus tickets along with discounted holiday packages are being offered just to lure the floating population in malls and highstreets.