First Free Story (1 of 3)

More travel executives get their mission-critical industry news from Skift than any other source on the planet.

Already a member?

In online retailing speak, conversion means turning website visitors into paying customers.

Conversion could also be the next buzzword for struggling corporate travel agencies as they look to turn their client’s employees, grounded due to coronavirus-related restrictions, into holidaymakers.

Leading the pack is India’s Yatra. It’s just embarked on an investor roadshow (a virtual one, at least) to drum up interest, and is highlighting how it wants to migrate corporate travelers over to other side as leisure travelers.

It’s not the only one, as TripActions prepares to unveil a leisure travel product for its business travel clients later this month.

Join Us For Our Skift Global Forum Online Conference September 21-23

Yatra updated potential investors on its ambitions at the LD Micro 500 Conference on September 2, ahead of posting its 2021 first-quarter results Wednesday. India’s fiscal year covers April 1, 2019 to March 31, 2020.

For the three months ended June 30, 2020, it reported adjusted revenue of $3.1 million, which is a decrease of 86.2% on the previous year’s first quarter. It also recorded a first-quarter loss of $4.1 million (adjusted earnings before interest, taxes, depreciation, and amortization).

Clearly, Yatra is anxious to tell its story to potential new investors. Next up, Yatra is taking part in in the H.C. Wainwright 22nd Annual Global Investment Conference on September 14, and the Sidoti & Co Fall 2020 Virtual Investor Conference on September 23 and 24.

Yatra co-founder and CEO Dhruv Shringi is evidently a busy man, but he needs to be as extra investment will be useful following the collapse of its deal with U.S. software firm Ebix. In March 2019, Yatra signed a merger agreement with Ebix. That fell through in June and Yatra has filed a litigation seeking “substantial” damages for Ebix’s alleged breach of deal terms.

Multimodal Future

Speaking to investors at the LD Micro event, Shringi said Yatra recorded revenue of $89 million for its 2020 fiscal year. This was a year-on-year decline of 33 percent, and its performance was impacted by “stricter governance under which we were operating given that the (Ebix) merger was in process,” with Covid taking its toll on the last quarter. Legal and professional fees related to the merger transaction also came in at  $2.2 million in its 2021 first-quarter results.

Looking forward he argued Yatra’s “multimodal” setup was unique in the country, and so there were significant opportunities for growth. As well as laying claim to the country’s largest corporate travel services provider, with 700 corporate clients and 38,000 small and medium-sized enterprise customers, it operates a consumer platform. Two thirds of its bookings are from corporate clients, with the rest for leisure. And the Yatra name is one of the “most well recognized home-grown Indian internet brands,” according to Shringi, which would stand it in good stead once the pandemic passes.

“Customers who come to us from the corporate travel side of things also translate into becoming leisure travelers over a period of time. Because the first time people tend to travel in India is when they get a job,” Shringi said. “So by using our business-to-enterprise platform, as a way of acquiring of acquiring these customers … we are then able to migrate them from not just being corporate travelers on our platform but also leisure travelers. That gives us a unique way for customer acquisition.”

The effects of the pandemic have prompted more people to shop online, and travel is no different. But while Europe and the U.S. have mature online markets, coronavirus is accelerating the process in geographies where offline bookings prevail, including Latin America.

India’s MakeMyTrip Group also anticipates the trend to continue. “Given the drive toward contactless travel engagement forced by this pandemic, we believe online booking adoption should accelerate even faster,” said Deep Kalra, group executive chairman.

Ripe for Disruption?

In India, online penetration stands at below 10 percent for corporate travel management, and at 38 percent for leisure bookings, Shringi said during his presentation.

“Online penetration will continue to rise strongly. Tremendous disruption to the supply chain on the physical front has led to a greater acceleration of customers moving online,” he said, adding larger organizations were “aggressively” implementing new technology.

Meanwhile, Shringi believes India’s growing middle-class demographic, currently on pause due to Covid-19, would quickly bounce back and help the country follow in the footsteps of China, in terms of increasing disposable income. He even suggested Yatra was similar to China’s Trip.com — the “surrogate for the travel market” in the country.

“In a growing market like India, the consumer part of the industry is still relatively low given disposable income is still growing, and the larger part of the spend happens on the corporate travel side,” he added.

Overall, Yatra had 11.1 million cumulative customers in 2020, up from 9.7 million customers in 2019. Shringi said there was a potential market of 13,000 large corporations and 100,000 small and medium-sized enterprises in India that Yatra is ready to tap into.

And like many other corporate travel companies, it’s signing up new deals, with one of the more recent including a partnership with Amazon Business. This is another step towards diversification of the company’s portfolio beyond travel, according to reports.

There are 102,000 hotels on available on Yatra’s platform, and the tie-up gives them access to the Amazon Business marketplace to buy products, from linen and office supplies to safety and sanitization products. Yatra is also adding an expense management tool.

Meanwhile, the government is planning to grow to  200 airports by 2040, according to its “Vision 2040” scheme, with its top 31 cities having two airports, and the cities of Delhi and Mumbai three each.

So far so good, but Yatra can expect some intense competition. The battlefield is going to be a domestic one, and international travel management companies aren’t shying away from the fact they’re ready to compete anywhere domestically, in particular CTM, and FCM Travel, which has an equity presence in the country.

India is also currently battling with record cases of Covid-19. There have been 4.37 million confirmed cases, and the country has just overtaken Brazil to take second spot below the U.S. with 6.35 million cases. However, it’s reporting the fastest growth rate, with one million cases reported in the past two weeks, almost double that of the U.S., with more than 536,000 cases.

International travel remains restricted, but state borders have reopened and domestic flights have resumed. And like much of the U.S., restaurants and bars have opened.

Yatra has a cash balance of $33.7 million and has managed to cut its cash burn to $1.2 million a month (as of May 2020), compared to $3.8 million a month in March 2019. It has “adequate liquidity to weather any adverse environment for an extended period of time”.

Like its peers, Yatra has done most of the hard work. Its future depends on how India controls the spread of the virus and the resilience of Indian tourists, but perhaps most importantly whether its CEO can convert potential investors into actual investors during the virtual roadshow.

Register Now For Skift Global Forum, Happening Online September 21-23

Photo Credit: Yatra wants to see more of its customer's employees booking their own holidays using its platform. Arash Bal / Unsplash