India’s online travel market has expanded steadily in recent years and is set to cross $100 billion in value in a few years' time. Yet as the market matures, attention is shifting from aggressive discounting towards building financially resilient and economically sustainable models.
In the early years of expansion, aggressive discounting played a decisive role in helping platforms attract users and stand out in a fragmented market. Cashback offers and price incentives lowered the threshold for first-time adoption, allowing companies to scale quickly and build visibility.
As competition intensified, however, the underlying economics of this approach began to weaken. Across industries, customer acquisition costs have risen largely due to higher digital advertising prices and crowding across online channels. In travel tech, this pressure was amplified as platforms chased the same value-seeking users.
Discounts soon became an expectation, loyalty stayed shallow, margins narrowed, and growth turned increasingly expensive, exposing the limits of discount-led expansion.
Resetting the model
The reset now underway is centred on unit economics rather than headline growth, focusing on the contribution of each customer. Travel platforms are increasingly evaluating lifetime value, contribution per customer and the time needed to recover acquisition spend, recognising that rising costs demand financial discipline. Reducing the CAC payback period is emerging as a critical measure, with faster recovery enhancing long-term resilience. Retention has moved to the core of strategic planning, since repeat usage spreads acquisition costs over multiple bookings.
Data shows travel and hospitality applications maintain an average 90-day retention rate of around 40-45 per cent, highlighting the impact of consistent engagement. In response, platforms are investing in service reliability, customer support, and overall booking experience.
Beyond flight bookings
As the focus shifts from acquisition to value creation, cross-selling has become an essential strategy for travel platforms. Integrating flights, accommodation, transport and curated activities into a single journey allows acquisition costs to be spread across multiple interactions, enhancing lifetime value and optimising spend. With over 70% of travel bookings in India now happening online, the need for seamless and consistent experiences has never been greater.
Deeper insights into user behaviour allow platforms to offer personalised services and maintain service continuity, building trust and encouraging repeat visits. This approach highlights the advantages of customer-centred strategies in creating sustainable growth while making each interaction more valuable, supporting long-term business resilience and profitability.
These strategic shifts are not theoretical and are already visible in how some platforms operate. For example, when booking a flight, many travellers notice that some travel platforms, like EaseMyTrip, do not add convenience fees at checkout. It may seem like a small thing, but it builds trust. Over time, such choices encourage people to return, showing how travel tech is slowly moving away from quick gains and towards long-term value and loyal customers.
Value creation, not discount
The industry is evolving its approach, and moving beyond discount-led models allows platforms to nurture deeper customer relationships and create more predictable revenue streams. Focusing on economic sustainability now reinforces ambition, providing resilience across cycles and supporting measured expansion.
As the market matures, the ability to balance scale with profitability will define success. This phase reflects a maturing travel tech ecosystem where long-term value creation shapes strategy and sets the stage for sustainable growth.
The author is co-founder and CEO of EaseMyTrip.com
The opinions expressed in this article are those of the author and do not purport to reflect the opinions or views of THE WEEK.