Travel agencies such as MakeMyTrip, Yatra, Paytm and Cleartrip are upset over the new fee structure of the Indian Railway Catering and Tourism Corporation (IRCTC)- a subsidiary of the Indian Railways which handles online ticketing operations.
The IRCTC has decided to charge Rs 12 and taxes for every ticket booked through online portals as annual maintenance charges. And if the maintenance collection during the year falls short of the minimum amount, the difference will be recovered from the online travel agent when the service agreement is renewed.
Travel industry executives believe that the changed fee structure will result in almost 10-fold increase in amount they will have to pay. The executives expect costs to rise to between Rs 40 crore and Rs 50 crore, depending on the volume of tickets booked, the Economic Times reported.
IRCTC has exclusive right over the Indian Railways' ticket inventory and booking systems. "Every OTA has to enter into a sub-agency agreement with IRCTC, which is what they (IRCTC) have revised to make it even more onerous on OTAs making online rail booking on these platforms commercially unviable," a travel agency official told the ET.
According to the official, IRCTC charges used to be a flat Rs 25 lakh for almost every integration that the companies had to do, be it payment gateway, as agents, or as a wallet option on their platform. "Now with the pricing being moved to a per-ticket basis, it might be easier for smaller startups for whom the down payment used to be a challenge, but for others it is a cost that will be eventually passed on to consumers," the ET quoted the official as saying.
Apart from the annual maintenance charges, the IRCTC will charge Rs 5 for display of advertisements and Rs 15 for cash back offers or for clubbing ticket sales with products and services of third-party. It will also charge an additional Rs 25 per ticket in case of cross-selling of any third-party products.
Travel agencies have termed the move as arbitrary, and are discussing the proposed policy changes with IRCTC. According to the report, some of the travel service providers may consider approaching regulatory authorities if a solution is not reached within a reasonable period of time.