The country’s bellwether online travel company, MakeMyTrip, has made a fairytale entry in the US stock market. Its shares surged by more than 90% when the company was listed on America’s leading stock exchange, NASDAQ on Thursday. Earlier, the travel company had raised $70 million in the US with its Initial Public Offering (IPO) of 5 million shares. When the shares were listed on NASDAQ, it went up from the offer price of $14 per share to $26.45 at close.

Deep Kalra, CEO, MakeMyTrip, who rang the opening bell at NASDAQ on Thursday to begin trading, said, “It is fair to say it’s been a fairytale listing for us now. We are very excited. I don’t think anyone anticipated this.” In a day, the company’s valuation went up from $480 million to $800 million.

“We are trying not to get carried away with this dream run,” continued Mr. Kalra, who founded the company in 2000. “It’s a good milestone but only the beginning of a long journey,” he added. “We weren’t really focused on the price as much as focusing on getting the right kind of investors. I am happy to say we have some really nice long-term names take good positions.”

MakeMyTrip began its journey by simplifying traveling to India from the US. Mr. Kalra later shifted the spotlight to travel within the country. This shift in focus was well-timed, as India was discovering the uses of internet with broadband connectivity becoming commonplace. Together with the change in the mindset of Indians in relation to traveling, the company never had to look back. During the last year alone, the company had 1.6 million domestic air ticket transactions.

MakeMyTrip has grown over years to cover air tickets, hotel bookings, holiday packages, rail and bus tickets, car hire and access to travel insurance. The travel company, with the help of its portal, offers access to all major domestic and international airlines operating in the country, more than 4,000 hotels in the country, all major bus operators and Indian Railways.

The unbelievable recovery of Indian economy from global recession and the ensuing growth witnessed in the past year is prompting many international hotel chains to open shop in the country. The paucity of luxury hotel accommodation in India is acting as a catalyst in attracting global brands.

Amari Group of Thailand, Fairmont Raffles Hotels International of Canada, Mövenpick Hotels and Resorts of Zurich, Switzerland, Waldorf Astoria Hotels and Resorts and Luxe Worldwide Hotels are all vying for a piece of the Indian hospitality pie with plans afoot to scale up/establish their presence on Indian soil.

A recent study by the Federation of Indian Chambers of Commerce and Industry (FICCI) and Evalueserve points out that the country’s hospitality scene is already facing severe shortfall in hotel rooms and would require 150,000 more rooms in the coming five years at an investment of a whopping Rs. 60,000 crore. Out of this, half is expected to be in the budget to midrange and the rest in the luxury category.

While some of the new entrants in India are aiming for management contracts, a few are looking for acquisitions to gain an easy foothold in the hospitality market.  Mövenpick and Luxe Worldwide Hotels are the ones going in for direct acquisitions. Management contracts would allow hotel chains to run hotels in the country without any investment.

Many hotel chains such as Amari Group, Hilton Worldwide and Fairmont Raffles Hotels are proposing introduction of their exclusive brands in the country. While Amari is pushing its new brands Saffron and Ozo, Hilton has six brands up its sleeve – Hilton, Conrad, Hilton Garden Inn, DoubleTree, Hampton and Waldorf Astoria.

All these may lead to decline in room rents and making travel more attractive and affordable.

In February, India’s air traffic grew by over 15% and over 39 lakh people travelled by air in this month. This is a significant high in comparison to the number of people travelling by air last year in this month. In February 2009, 33.85 lakh people travelled by air.

But this is just a part of a long standing rise in the growth of air traffic in India. In January 40.87 lakh people travelled by air and the industry did not see a sharp drop in revenue after peak winter season.

India head of the Centre for Asia Pacific Aviation, Kapil Kaul said, “The growth is robust and yields have improved. March will see a modest growth over last year and then from April onwards we expect strong growth numbers. The domestic airline industry is on a recovery path and the low-cost model has proved itself here.”

Jet-JetLite was the highest share taker in the market. It got 26.1% of market share, while Kingfisher owned 22.7%. These two airlines gained the most as they utilised their domestic fleet on LCCs (Low cost carriers). Low cost carriers these days account for more than 70% of domestic air transport. Indian airlines, which is the only full service airlines had 17.2% share in the air travel business.

CAPA spokesperson said that in India, full service airlines have markets between metros only. A travel agent said, “AI will have no option but to have domestic budget service otherwise it faces the prospect of being overtaken by pure LCCs on Indian routes.”

India is one of the most potential tourism markets in the world. India’s Ministry of Tourism has estimated that the number of foreign tourist’s would be around 10 million by 2010. The year 2008 witnessed sharp decline in tourism compared to 2007. This decline was due to the terror attacks in Mumbai in November 2008 and also due to recession. Government has taken several initiatives to boost tourism market. Government increased advertisement spending and launched a campaign on ‘Incredible India’ and the ‘Ahithi Devo Bhava’. Government has also made a significant impact in tourism by requiring that each and every state of India have a corporation to administer support issues related to tourism. Also post Mumbai terror attack, 2009, was declared as 2009, ‘Visit India year’, offering a variety of promotions to tourists in 2009. Focus was shifted to providing security and reassuring visitors that India is a safe place to tour. Several measures were taken to step up security such as special tourist police in important tourist locations and increased manpower for improving security in airports and railway stations.

Post Mumbai terror attack hotels also increased their security checks and measures to provide a safe stay for the tourists. India will continue to grow in tourism market with various International sports events such as Cricket 20/20 and Commonwealth Games acting as drivers for this market. As per the reports, Commonwealth Games is estimated to bring in more than 3.5 million tourists to India in 2010, which are scheduled to be held in Delhi. India is also likely to gain from medical tourists. It is currently growing at around 30 percent per annum. Medical tourist arrivals are expected to reach one million soon. Overall, India has a bright future in tourism market.