Why Did redBus Launch Hotel Booking?

redBus is adding hotel booking to its offering. On the site, now you can search and book hotels across India. The feature is still in Beta and redBus hasn’t made a formal announcement yet. 

But why is it doing this? The simple answer: redBus was recently acquired by the ibiboGroup, which owns other portals such as hotel and ticket booking site Goibibo and e-commerce firm Tradus. No harm in offering complementary services that customers might be looking for.

But wait, there’s more to it.

Ashish Kashyap the CEO at ibiboGroup told NextBigWhat that the inventory is being aggregated by inGoibibo.com, a hotel inventory and campaign management platform.

For the ibiboGroup, it makes sense to leverage the redBus brand and cross sell hotel bookings on the redBus site. On the flip side, could a bad experience with the hotel harm the redBus brand?

At various points in the company’s journey, it has debated diversification as well as overseas expansion. However, what has worked very well for redBus so far is its singular focus on bus ticketing in India.

redbus hotel

Of late, things have also changed in the bus ticketing industry. The growth in bus travel has been sluggish. In certain states like Andhra Pradesh, the market has shrunk to a fifth of its size because of issues relating to Telangana and recent spate of accidents that led to tighter regulation around bus ticketing.

Here’s a quick Q&A with Ashish Kashyap, in which he talks about the thought process behind launching hotel booking on redBus.

Why sell hotel tickets when redBus is known mostly for bus ticketing. Is there a risk to the redBus brand if hotel bookings don’t go well?

There are some significant reasons :

1) A need clearly spelt out by the bus travelers. Following are the segments of people booking on redBus a) Holiday travelers b) religious travelers (destinations such as Katra, Shirdi) c) SME business folks d) Students and executive going back to their town. A, b & c are all very relevant segments. The hypothesis further got proven as we received hotel bookings within the first hour of going live without a single outbound communication.

2) From an ibiboGroup point of view this is a very powerful equation. From a demand side, Goibibo.com and redBus have very low overlapping transacting audience. Goibibo.com reaches out metro centric audiences, while redBus has deep penetration beyond metros. From a supply point of view, inGoibibo.com is the core system which is used by both Goibibo.com and redBus.in. At the end of the day this drives liquidity for the hotel owners.

When it comes to mobile, are you planning to concentrate your efforts on one app that works great for both bus booking and hotels instead of promoting multiple apps for redBus and goibibo?

We will continue to build and develop our two distinct consumer brands and apps i.e. Goibibo.com & redBus.in. I personally have strong belief in multiple consumer brand propositions in the travel space. We would do the same on the mobile too. redBus.in is already the number one OTA app on Android, iOS and Windows. We will shortly launch hotels on the redBus mobile app too. Just like the way we launched bus on Goibibo.com apps.