Info-tech

How MakeMyTrip is positioning itself to be super app for travel

Forum Gandhi Mumbai | Updated on September 25, 2019 Published on September 25, 2019

File Photo of co-founder and CEO of MakeMyTrip, Rajesh Magow.

Travel company to foray into cruises, metro train ticket booking

Co-founder and CEO of MakeMyTrip, Rajesh Magow is on a new mission to convert what he started in 2000 along with Deep Kalra into a travel super app. By 2020, Magow wants to make MakeMyTrip a one-stop-shop for all the services that a traveller may need.

“When you’re travelling, and whatever comes to your mind, in terms of your need for travel, we should be able to sell this. We will take care of all kinds of transport offerings, whether it is rail, bus, intra city cab, flight, and airport transport. We will look at hotels offering including Villa, apartments, homestays, and other alternative accommodations. ” Magow told BusinessLine.

New ventures

As a part of this strategy, MakeMyTrip has already ventured into high margin verticals like hotel bookings and holiday packages. According to Magow, that strategy is doing well for the company. “Today, if we look at our business mix, 54 per cent of our revenues come from non-flight business, hotels and holiday packages and 4 per cent comes from ancillary revenue,” he said.

Magow added that he sees great potential in the transport segment. Red Bus, a bus transport company and a subsidiary of Make My Trip, is growing at about 35 per cent year-on-year. Despite headwinds in the aviation industry in India and abroad, Make My Trip saw robust growth in the first quarter of the FY 20. According to him, about 35 per cent of revenue comes from air business and 10 per cent from the bus transport segment.

The company had recently announced intra-city cab services in a few locations. In the rail segment, too, the company offers train tickets in association with the IRCTC. “In FY 20, in the rail segment, we are looking at selling metro tickets on our platform as well which we will start with Hyderabad and Mumbai.”

As a new offering, part of the holiday packages segment, MakeMyTrip will also offer cruise packages. Magow said that the launch is coming up in the next 3-4 weeks.

It also plans to go big on the ‘experiences’ segment. The company recently launched experiences that will include activities and events, weekend travels and staycations. For those who fancy a day at a five-star hotel to experience lavish hospitality, “we are looking at the experience as ‘spending a day at a five star’ as an offering. It’s launched recently and people liking it.”

Betting big on domestic travel

Prime Minister Narendra Modi had last month urged Indians to boost domestic tourism by visiting at least 15 tourist destinations within India by 2022.

Magow said that it is a welcome move since most of the company’s revenues come from the domestic market, however, the growth potential is quicker in the outbound market. “For MakeMyTrip, the 60 per cent from air ticket revenue comes from domestic travel, similarly, in the hotel business 85 to 90 per cent revenue comes from domestic travel,” he explained.

But there are concerns over tourist infrastructure in many of the domestic sites. “The overall experience has to be good, we have a lot of people in our country. But the capacity of some cities to handle the tourists is not necessarily very adequate. Hopefully, the Prime Minister’s statement will bring attention to improving infrastructure overall especially transportation,” said Magow.

However, “when you look at the growth rate, between domestic business as well as outbound business the growth rate for outbound is much more. Outbound growth is at 40 per cent, or 50 per cent, depending upon which business you look at it flights or hotels, while the demand for growth will be in the 15-20 per cent for domestic. So potentially outbound business is growing faster than domestic,” he added.

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Published on September 25, 2019
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