MakeMyTrip Group has elevated Rajesh Magow, co-founder and CEO of its India business, to the role of group CEO, where he’ll oversee its leading brands, MakeMyTrip, Goibibo, and Redbus, the company said on Tuesday.
Co-founder Deep Kalra is rising from group CEO to the newly created role of group executive chairman. Kalra will help oversee product innovation and expansion, geographic growth, business model innovation, and corporate development for India’s largest online travel company.
MakeMyTrip Group announced the leadership moves at the same time as its financial results for the 2020 fiscal third quarter, which closed at the end of 2019.
During a call with investment analysts, the executives cautioned that the group’s growth may moderate. In India’s upcoming fiscal year, the economy is likely to grow at the slowest pace in a decade, they said. That will temper travel sales. Magow and Kalra also cited the coronavirus, whose uncertain trajectory may put a damper on demand for outbound travel.
India’s domestic airline sector has been in turmoil, especially with the collapse of Jet Airways last year. But recovery is in the air.
“We are back to the same level of capacity as it was before Jet went down,” Magow said on a call with investment analysts.
Since 2018, Kalra and Magow have pushed a traveler loyalty effort. The company now has 139,000 members of its paid subscription program and 1.1 million members of its free plan.
The company’s subscription program, MMT Double Black, is a luxury twist on the loyalty program. Customers pay a fee in the style of Amazon Prime to get access to members-only benefits, such as no fee for canceling trips.
The group continues to invest in its free loyalty program, too. MMT Black Loyalty, which debuted in July 2017, lets travelers earn vouchers redeemable toward future bookings.
For context on this subscription trend as a tool for driving loyalty, read Travel Megatrends 2020: Subscription Travel Is the Next Frontier of Loyalty.
The loyalty programs generate money, but they also costs money, too. The costs helped contribute to marketing and sales promotion expenses rising by 3.2 percent, year-over-year, to $151.4 million for the quarter.
The news wasn’t all bad, though. The total marketing and sales promotion expenses represented 73.3 percent of total adjusted revenue, down from the 80 percent range as a share of the revenue more common in recent years.
For the quarter, MakeMyTrip grew its adjusted revenue by 13.4 percent, year-over-year, to $206.7 million. Its adjusted operating loss declined to $11 million, from $22 million a year earlier.
During the quarter, MakeMyTrip Group processed $1.7 billion in gross bookings, a rise of about 18 percent, year-over-year. This figure represented sales of 8.2 million room nights booked independently and 8.4 million room nights booked in packages.
MakeMyTrip didn’t provide a meaningful update on a recently announced probe by the Competition Commission of India into its relationship with hospitality company Oyo. The investigation may take up to two years.