MakeMyTrip's Unprecedented Success: A Record-Breaking Quarter in Indian Travel Industry
MakeMyTrip, a leading player in the online travel industry, has achieved a historic milestone in its latest fiscal quarter for 2024, setting new records in gross bookings, revenue, and profits. The company's gross bookings soared to an impressive $2.1 billion, marking a 22% increase, while its adjusted operating profit skyrocketed by 70%, reaching $33.4 million. This significant growth paints a vivid picture of India's burgeoning position in the global travel market.
India's Expanding Travel Landscape
During an earnings call, MakeMyTrip Co-Founder and Group CEO, Rajesh Magow, emphasized the robust investment in India's travel infrastructure, including the development of airports, highways, and railways. This investment is a key factor in India's rising global travel market share. Notably, outbound travel from India has bounced back to pre-pandemic levels, with projections placing India as the fifth-largest outbound market globally by 2027. India’s contribution to global tourism receipts has ascended from 0.7% in 2000 to 2% currently, and domestic travel is expected to rank third worldwide by 2027. Magow attributes this growth to the increasing disposable income in the country, fueling demand for outbound destinations.
Shifting Consumer Trends in Travel
The surge in consumer holidays and the allocation of a larger portion of disposable income to travel experiences are significantly driving market demand. Magow notes a trend where customers are moving up the value chain, for instance, upgrading from mid-segment to premium in both hotels and airlines.
Air Ticketing and Accommodation: Sectors of Growth
Despite challenges like airline insolvency and technical issues, MakeMyTrip's domestic air market share remains formidable at 30%. The international air ticketing sector has not only recovered but is also exceeding pre-pandemic performance. The company is innovating in this space, introducing an enhanced booking process for business class flight tickets, complete with visuals of cabin features and amenities.
In the accommodation sector, the company experienced robust growth in hotels, homestays, and package deals, achieving record check-ins and expanding its domestic property offerings. The homestay business is gaining popularity, and the company is also venturing into spiritual tourism products. The revenue mix from hotel and packages has improved from 40% to 45%.
Boost in MICE Activities and The Connected Travel Feature
The company has observed an uptick in non-leisure travel events such as corporate offsites, MICE activities, and weddings. These events are increasingly being held in hotels, bolstering demand and helping to maintain market prices. Moreover, MakeMyTrip has introduced a connected travel feature, similar to Booking.com’s Connected Trip, focusing on bus and rail combinations for routes with limited availability. This feature leverages the company's extensive inventory, enhancing customer options and convenience.