Hotels, buses, rail and AI in the fight for second place

“The debate about the number two position is finally over,” declared Ixigo’s chairman and group chief executive Aloke Bajpai, in a conversation with Mint. “If you look at impact, we touch more travellers than anyone else. On financial metrics like revenue or GTV (gross transaction value), we are number two. On growth, we are number one because we are the fastest growing OTA (online travel agency).”

But, Manjari Singhal, rival Cleartrip’s chief business and growth officer, had a ready counter. “We have a strong right to be number two,” she said. “This year was about laying strong foundational layers.”

Their competing assertions reflect a deeper truth about the shape of India’s online travel market. MakeMyTrip (MMT) sits securely on top, holding more than a 50% market share, according to travel advisory and analytics firm VIDEC. This is a level of dominance that has proved difficult for any rival to meaningfully challenge. Below it is a tightly clustered pack of other OTAs. Consumer-focused Ixigo and Cleartrip sit closest to the number two spot, with EaseMyTrip and Yatra completing the set. Each company’s market share hovers between the 7% and 9% mark.

But, EaseMyTrip’s numbers have stagnated for nearly three years, leaving it unable to keep pace with the rest of the market. Yatra, meanwhile, has increasingly pivoted toward corporate and enterprise travel, effectively taking itself out of contention for the number two consumer OTA position.

But why does this battle for number two matter?

Ripe for growth

The OTA sector in India feels mature because the companies have been around for two decades. MMT was founded in 2000, Cleartrip and Yatra in 2006, Ixigo in 2007, and EaseMyTrip in 2008.

“There is a perception that the industry has been around for a very long period, but when we look at some of the underlying numbers in terms of internet penetration, we are still far behind (many other markets),” said Gaurav Kothari, principal at investment fund Prosus Ventures, which took a 15% stake in the publicly listed Ixigo this October. “Travel is at an inflection point. Once GDP (gross domestic product) reaches a certain stage, sectors like travel benefit disproportionately. We think overall travel is a long-term secular growth story.”

Travel is at an inflection point in India.

Anand Ramanathan, partner and consumer industry leader (South Asia) at Deloitte, underscored this sentiment. “There is both a penetration story and a market expansion story here. Online penetration is still barely 50% (of the total travel pie), so the scope for growth is huge,” he said.

VIDEC’s estimate of online penetration at 42.7% in fiscal year 2025 (FY25) indicates how much headroom remains. OTAs themselves account for only 27.4% of total travel bookings, and much of the newer user base is coming from categories outside traditional air travel.

This backdrop makes the number two race more consequential. With MMT far ahead, the question is not who can catch up now, but who can build the platform that will make them indispensable to India’s next 100 million digital travel users.

The numbers

The pecking order in terms of gross booking value (GBV), or the total value of booking made through an OTA platform, is led by MMT ( ₹80,954 crore), according to VIDEC. Ixigo and Cleartrip, the next two players in the order, are neck to neck, with GBV of ₹14,971 and ₹ 13,956, respectively. Cleartrip does not disclose its GBV and its number is an estimate.

Nonetheless, there is a wide divergence between Ixigo and Cleartrip when it comes to revenue. While Ixigo generated a top line of ₹1,191 crore in FY25, Cleartrip could only cobble up ₹234 crore. The divergence reflects the categories the two companies have focused on and their differing philosophies on burn.

Ixigo, over the years, built trust through rail and travel information tools. The company has been able to generate organic traffic, high repeat usage— Bajpai claims that over 85% of the bookings last year came from repeat users—and has lower acquisition costs.

Cleartrip, in contrast, has remained an air-heavy OTA, with flights accounting for over 80% of its GBV. Its customer inducement costs last fiscal year were among the highest in the industry at ₹608 crore—the company is unapologetically chasing scale.

“I believe growth solves the bottom line, if you do it right,” Singhal said. “If I had to solve for the bottom line, it is the easiest thing—I have to just scale down. But that is not the Flipkart philosophy of doing things.”

Converging paths

Cleartrip’s journey to this moment has been uneven. Once regarded as a design-forward, premium OTA, it lost strategic direction after Flipkart acquired it in 2021. The company experienced team churn, shifting priorities and uneven execution cycles. “For Cleartrip, this year was about putting in place some of the foundational layers. It is funny to call them foundational because Cleartrip is an old company, but as an organization we had never quite been able to get a real grip on it,” said Singhal.

The past months were spent rebuilding core systems, refocusing product teams and aligning the company’s direction with Flipkart’s broader travel strategy.

Categories like buses and trains had become powerful acquisition funnels for rivals. Now, Cleartrip intends to fix that gap. It is preparing to relaunch bus bookings and launch trains directly through an integration with the Indian Railway Catering and Tourism Corp. in the first quarter of calendar year 2026. Earlier, it offered train bookings through a third-party partnership.

“Buses and trains become very important because 60-70% of India’s travelling universe sits in these two categories. So, the idea is to make buses and trains our acquisition engine,” Singhal said. “Roughly 9 million people become first-time flyers every year, and today we miss that opportunity completely because a competition who already has these businesses is able to leverage their databases.”

Manjari Singhal, Cleartrip’s chief business and growth officer.

That competition is Ixigo, which began as a travel meta-search platform and evolved into a rail utility that solved practical issues such as PNR predictions, platform numbers and delay patterns long before it earned meaningful revenue from air.

When Ixigo finally launched rail ticket transactions in 2017, much later than its rivals, it already had deep credibility with users. That trust would later power its expansion into buses, where AbhiBus, which it acquired in 2021, now holds around 11% market share.

When trains are unavailable, users look for alternatives within the same app. When they travel to a new city, they often need accommodation. This creates an organic cross-category funnel that has become Ixigo’s signature strength.

Ixigo is now eyeing the hotel segment and with Cleartrip moving into bus and rail, the two players have set themselves up for a face off.

The margin pool

Among the categories OTAs operate in, hotels stand apart because they offer significantly higher margins, especially compared to air. Industry estimates place hotel commissions at 18% to 20%, compared with just 0.6% to 0.7% in domestic air ticketing. Hotels are also the second largest category in the OTA business after flights, with an estimated market size of $4.2 billion in FY25, according to VIDEC.

Cleartrip has a meaningful head start here. While the bulk of its estimated almost ₹14,000 crore GBV still comes from air bookings, hotels now contribute about 15%, and Singhal wants that share to double to 30%. This is not merely about expanding a category, but about stabilizing the company’s economics. Hotels are where OTAs can create stickiness, influence decision-making and differentiate on inventory and experience.

Ixigo, by contrast, launched hotels only in late 2023 and has not yet reached product-market fit. Bajpai has been candid about the challenge. “The problem is hard and you need some patience to solve this. We have not invested in marketing for this category yet. Once we have a deeper product-market fit, you will see us starting to chase scale,” he said.

Hotel expansion is a slow build that requires inventory relationships, reliable payment flows and high-quality consumer experience. It does not help that India’s hotel supply is highly fragmented, with under 10% of the country’s hotel room supply falling in the chain or branded category.

VIDEC co-founder and chief executive Virendra Jain explained that this convergence was inevitable. “Air yields wafer-thin commissions and is a duopoly (India’s domestic aviation market is mostly split between market leader Indigo and Air India),” he said. “If you do not expand horizontally to non-air categories, you hit a revenue ceiling with no profitability in sight.”

Big backers

When Flipkart acquired Cleartrip in 2021, the expectation was that an integrated play would give both significant advantages. However, that never materialised, until now.

“We were earlier competing with Flipkart in some manner,” Singhal said.

Flipkart has its own travel business, which it launched in 2019 with flights and hotels. That travel category has been powered by Cleartrip after the acquisition. However, the two companies continued to compete for the customers they targeted until recently.

Now, the two companies have moved toward an integrated structure, allowing Cleartrip to tap into Flipkart’s 70 million monthly shopper base. Even a small conversion would be significant for Cleartrip.

Meanwhile, Prosus’ entry changes the equation for Ixigo—the venture firm invested a total of around ₹1,900 crore for a 15% stake in the company, of which 5% was via the secondary route.

With over $70 billion in global assets and $6.5 billion deployed in India across 30 companies, clearly Prosus has deep pockets.

“Ixigo’s growth has not been marketing-driven. They raised less than $100 million until the Prosus investment in their entire journey, and they had already built a very large business,” Prosus’ Kothari said.

External factors

Even as Ixigo and Cleartrip battle each other, they have to contend with external constraints that shape the entire travel ecosystem. Supply remains a persistent limitation.

“I wish there were less supply constraints in flights, trains, and hotels. It just seems like we are perennially constrained as a country in terms of the number of planes, trains and even hotels we have versus what we need,” said Bajpai.

As domestic airfares rise and hotel prices increase, Indian travellers are turning outward. India’s outbound tourism market stood at $21.6 billion in 2024 and is expected to reach $61.7 billion by 2033, according to Research and Markets. “International is the silver lining,” Ramanathan said. “It is one of the reasons the margins come in (for OTAs).”

Bajpai echoed this. “International is gaining at the cost of domestic,” he said. “For us, in the last four quarters, international growth is in line with or faster than domestic.”

For Cleartrip as well, international contribution is rising. Singhal said the company is prioritising international accommodation, building inventory and solving for the specific needs of Indian travellers. “We should go live with a very good proposition in international (hotels category) in the next three to four months,” she said.

The AI journey

For more than a decade, OTAs have been defined by categories such as air, hotels, rail and bus. But as the market evolves, this category-driven lens is beginning to lose relevance. VIDEC’s Jain says that OTAs must evolve from intermediaries to orchestrators who manage the entire travel process rather than just a single transaction.

Both Ixigo and Cleartrip are turning to artificial intelligence (AI) to enable this shift. Cleartrip, under the direction of Flipkart chief executive Kalyan Krishnamurthy, has placed AI at the centre of its product philosophy. “Kalyan’s single-line guidance to us was that 60% to 70% of what you do has to be around AI,” said Singhal. The company is experimenting with conversational discovery tools, itinerary builders and intelligent price guidance to reduce cognitive overload.

Flipkart chief executive Kalyan Krishnamurthy.

About 90% of Ixigo’s chat-based support is fulfilled entirely by AI today. On the consumer side, the company uses AI to make the journey more intuitive. When an Ixigo user books a flight, its agentic AI handles check-in, seat selection and trip tracking, pushing boarding passes and real-time updates on gates, airport timing and baggage belts directly to the user.

These changes signal a shift in how Indian OTAs define their role. The company that builds a frictionless, personalized journey is likely to capture the next wave of demanding digitally native users.

Beyond the fight

Cleartrip and Ixigo have spent years preparing for this moment. Their strategies, once distinct, have now brought them into direct confrontation. Both want to build a multi-transport platform capable of serving India’s evolving traveller. Both want to scale hotels, grow international, reduce friction and use AI to cater to an evolving customer base. They are also attempting to follow the MMT playbook of launching a new category every few years and becoming its leader.

Yet, for all the years behind them, they still need to demonstrate clear, sustained success in new categories. The question, therefore, is not just whether one of them can claim the No. 2 spot, but whether that achievement will be enough in a market where new business models can redraw battle lines quickly.

Indian e-commerce was once a face-off between Amazon and Flipkart until Meesho changed the narrative. Quick commerce reshaped retail even before e-commerce could take market share from physical stores. The travel industry may yet be disrupted by a new approach to discovery, planning or experiential journeys.