Forum Gandhi | Mumbai, June 8 |
The travel company’s recovery rate is ahead of industry trends, says CEO
MakeMyTrip is cautiously optimistic about the recovery of the travel industry. The travel company is expecting a complete recovery in the domestic segment by September this year, while the international travel is expected to recover by March next year.
Speaking to BusinessLine, Rajesh Magow, Co-Founder and Group CEO of MakeMyTrip, said that green shoots of recovery in the domestic travel segment are visible since March. “Overall domestic travel in India is recovering gradually and picking momentum in a few segments. In the leisure segment, the consumer sentiment is at an all-time high which is backed by summer vacations, and even corporate travel is picking up pace,” he said
Generally, summer travel is a peak period for the travel industry but the pandemic–related restrictions over the past two years have been a dampener.
According to Magow, at an industry level, the pre-pandemic recovery is approximately in the mid-80 per cent and the demand in corporate travel is at 75 per cent.
However, MakeMyTrip’s recovery rate is ahead of the industry trends, he said. “In the domestic travel segment, our flights, hotel and bus segments are at approximately 90 per cent of pre-pandemic times.”
Bullish about recovery
Speaking about international travel, Magow said that the industry is quite bullish about recovery. He said that the international travel recovery trends for the industry are at 45 per cent whereas for the company it is at 50 per cent of pre-pandemic levels.
“Southeast Asia and the Middle East remain the top travel destinations along with Europe. However, Europe is combating delayed visa issues,” he explained.
When asked, on his expectations for the complete recovery for the travel industry, he said: “We expect that by the first half of this fiscal domestic travel should be back, and by the end of this fiscal we expect a complete recovery for the international travel.”
Travel industry worst hit
The travel industry was among the worst hit industries globally because of the pandemic. To top it off, the industry was hit hard because of the rising ATF costs and inflation. According to him, if it weren’t for these issues, the travel industry would have seen a quicker recovery.
“Besides Covid-19 cases, the inflation rates and the rising ATF prices are a dampener translating into higher flight ticket costs and making travel expensive. If these things weren’t impacting the industry, we would have achieved pre covid numbers by the June quarter. Geopolitical issues, too, are a dampener. However, the customer sentiment and the summer travel is providing a balance and making the industry confident of a quick recovery,” Magow added
However, despite headwinds, MakeMyTrip has managed to gain market share the company’s chief said. “Prior to Covid, we had 27 per cent market share in the flights segment, and now we are at 30 per cent. Even with our premium hotel segment, we are operating at 140 per cent of the pre-pandemic levels.
Innovations boosted growth
When asked what was boosting this growth despite fierce competition, he said, “The company made multiple innovations, added multiple streams of revenues on the b2b and b2c side to give it a boost.”
Today MakeMyTrip’s revenue mix is 50 per cent from the hotel bookings and holiday packages segment, approximately 30 per cent to 35 per cent from the air travel segment, 10 per cent from the bus travel segment, and 5 per cent from the ancillary revenues. In the future, Magow said that the company aims to generate at least 10-15 per cent of its revenues from the ancillary revenue segment.