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As demand outpaces supply, Rajesh Magow, the Co-Founder & Group CEO of MakeMyTrip discusses potential implications on summer vacation costs, suggesting a balance in the winter season. Exploring emerging travel preferences, he identifies popular destinations like Palampur and international hotspots such as Turkey and Greece. Magow also unveils MakeMyTrip’s strategic focus, emphasizing significant growth in homestays and corporate business. In this interview, the Group CEO of the NASDAQ-listed OTA discusses the future of travel and hospitality and shares key insights into the industry’s promising outlook for FY25, highlighting the gradual resolution of supply challenges in the domestic flight market and the optimistic surge in outbound traffic.
Kindly share the outlook for FY25 from the industry as well as company perspective
FY25 brings optimism to both MakeMyTrip and the travel industry. Domestic flight challenges are easing thanks to operational improvements and new planes. Addition of aircraft and refurbishments of the aircraft signals positive supply changes. Outbound traffic has rebounded to pre-pandemic levels, propelling growth. However, inbound travel continues to remain below pre-covid levels. The hotel sector is buoyant, including homestays, with expansion plans evident. There is also a steady consumer demand, influenced by evolving travel behavior. Mainly, hybrid work setups and a growing middle-class income position FY25 for sustained growth, supported by the rising disposable.
Will demand continue to surpass supply in travel, hospitality, and aviation, and will summer vacation costs increase as a result?
Yes, historically, there’s been a supply crunch leading to increased rates. This summer, there could be a demand-supply imbalance, potentially causing rates to rise. However, I anticipate a balance in winter, with supply catching up to meet the positive demand momentum.
Possibly, summer vacation costs may rise, but it’s premature to conclude. We must wait for airlines’ schedules, new planes, and announcements. While some insights suggest improvement over last summer, certainty remains uncertain. Fingers crossed for a better outcome.
Which destinations are gaining popularity among Indians, and what travel trends are emerging?
In India, traditional summer hotspots like Shimla and Manali remain popular, but emerging trends signal a rising interest in Palampur, the Dhauladhar hills, and various Uttarakhand locations. Goa remains a perennial favourite. Internationally, increased demand is anticipated for short-haul destinations like Vietnam, Cambodia, Hong Kong, and Macau, as well as long-haul options in Europe, including Turkey and Greece. Despite geopolitical challenges, certain destinations, like pre-conflict Ukraine, hold growth potential, promising a diverse range of destinations for the upcoming travel season.
How are MakeMyTrip’s recent initiatives in amplified segments, such as cruises and visas, shaping the company’s overall growth trajectory?
MakeMyTrip has recently ventured into visa services, introducing flights to Dubai. Besides this, homestays have thrived with over 100,000 rooms, experiencing a robust 40-50 per cent YoY growth in the villa segment. Corporate business, facilitated by the MyBiz tool, is a significant contributor, boasting a 30-40 per cent YoY growth in volumes and revenue. While the cruise segment is WIP, MakeMyTrip focuses on scaling up new segments, particularly emphasizing homestays, flights, and hotels.
From a country perspective, with the overall infrastructure expansion, which sectors do you anticipate significant growth in? Will it be rail, air, or hotels?
A: The country is witnessing substantial infrastructure expansion across various sectors. More hotels and homestays are emerging, and road infrastructure has expanded significantly. An untapped online segment is intercity cabs. Rail projects worth 40,000 crores are in progress, and 22 new airports are on the horizon, contributing to the overall supply-side expansion. Projections indicate double-digit growth in the travel and tourism industry, encompassing all segments, as increased connectivity and accommodation options cater to the growing consumer demand for diverse travel experiences.
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