MakeMyTrip expects to recover business to pre-Covid levels

Online travel aggregator and booking site, MakeMyTrip, listed on Nasdaq, expects its domestic travel business vertical to recover to pre-Covid levels around the April – June quarter of next fiscal (Q1FY22).

The segment, which is currently operating at 70-75 per cent of pre-Covid levels, is driven primarily by the preference for select destinations. It is expected to rebound as more “drivable locations open up” and “people’s confidence resume as vaccination picks-up”.

Corporate travel should pick-up to be around 60 per cent of pre-Covid levels (up from the current 50 per cent levels) in Q1FY22.

Overseas travel business, which continues to be “badly hit” with just two major holiday destinations operating – parts of West Asia and Maldives, is expected to see a “late recovery”, perhaps towards the end of FY22. Prime markets like Europe and Thailand continue to be off the radar.

According to Vipul Prakash, Chief Operating Officer, MakeMyTrip, leisure travel has been bouncing back smartly, with select destinations like Rajasthan, Goa, “even Kerala”, Andamans, North East, Uttaranchal and Kashmir, doing very well.

Drivable vacations have picked up, while “homestays are gaining popularity” in off-the-grid destinations where major hospitality brands are yet to have a presence. Hotels and alternative stays are reporting close to 70 per cent occupancy levels.

This apart, a host of confidence building measures have been introduced. These include, “technology-rich product innovations”, contactless check-in at hotels for customers, a Pricelock feature’ (that’ll lock up flight fares up to seven days in advance and reserve seats for a minimum fee without actually paying for the fare upfront) and safety checks (mask usage by cab drivers and sanitisation of the vehicle during a trip).

“There are a lot of external factors on which our businesses depend. However, leisure travel is witnessing a rebound; and in corporate travel, the small and medium enterprises are driving numbers. Big corporate bookings are still on the slower side. International businesses will take a few more quarters, if not a year to bounce back. Factors like herd immunity and ease of travel are essential for international travel to rebound,” he told BusinessLine .

“People plan ahead for overseas travel. Even if destinations open up, it will still take time for bookings to be back,” Prakash added.

Revenues

MakeMyTrip reported revenue of $56.8 million in the quarter ended December, a decrease of near 60 per cent (in constant currency terms), year-on-year.

The decrease in revenue was primarily due to the continued impact of the Covid-19, including lower travel demand. Revenue in the quarter increased by $35.7 million, over the $21.1 million reported in the September quarter.

For the quarter, the company narrowed losses to $ 3.5 million; as against the $ 29.5 million loss in the year-ago period.

According to Prakash, MakeMyTrip saw improved profitability during the quarter and was able to bring down losses. Investments were made in several initiatives that include improving the partner business, revamping post-sales and customer care services.

The company expanded to the GCC (Gulf Cooperation Council) countries beginning with flight bookings, and would now expand into hotel booking services. “We are cautiously bullish over operations in the next three to six months,” he added.

MakeMyTrip has also done a successful fund raise of $200 million at zero interest rate through ‘convertible senior notes’ due 2028.

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