MakeMyTrip's record-breaking quarter is a significant addition to the unfolding narrative of India's travel landscape.
MakeMyTrip reported its highest-ever quarterly gross bookings, revenue, and profit in its third quarter for fiscal year 2024.
Gross bookings reached $2.1 billion, growth of 22%, while adjusted operating profit grew by 70% to $33.4 million.
The India Story
Infrastructure Investment: Highlighting substantial investments in travel infrastructure, including airports, highways, and railways, MakeMyTrip Co-Founder and Group CEO, Rajesh Magow, talked about India’s growing share in the global travel market during the earnings call on Tuesday.
Travel Growth: Outbound travel from India has recovered to pre-pandemic levels, and India is expected to be the fifth-largest outbound market by 2027. India now represents 2% of tourism receipts globally, up from 0.7% in 2000, while the country’s domestic travel is poised to become the third-largest globally by 2027.
“The way in which disposable income is growing in country, that’s definitely going to be the driving force for demand to go up for outbound destinations,” Magow said.
Disposable Income Increase: With consumers taking more holidays and allocating a higher percentage of disposable income for travel experiences, the shift is contributing to a surge in demand in the market, noted Magow. Within this trend, he said, there is also a notable behavior of customers upgrading from one segment to the next, such as from mid-segment to premium, be it for hotels or airlines.
Air Ticketing Business
Market Share: Despite short-term supply challenges, due to the insolvency of Go First and the grounding of airplanes due to Pratt & Whitney engine issues MakeMyTrip said its domestic air market share remains strong at 30%.
MakeMyTrip’s international air ticketing business has fully recovered and is growing above pre-pandemic levels, Magow said.
Flight Upgrade: Highlighting an increasing trend in the demand for business and premium economy tickets, Magow said the company has revamped the business class funnel for international flights.
“We have introduced an industry-first enhanced booking process for business class flight tickets where customers can preview visuals of cabin comfort, meals, in-flight entertainment and other amenities,” he said.
Record Check-Ins: The accommodation business, covering hotels, home stays, and packages, experienced strong year-on-year and quarter-on-quarter growth. The company achieved its highest-ever single line check-in and expanded its domestic property offerings.
Alternative Accommodation: Talking about the growth in homestay business and the increasing coverage of destinations, Magow said the company is has also started building on its spiritual tourism product during the quarter.
MakeMyTrip reported that the revenue mix from hotel and packages improved from 40% to 45%. The demand increase was observed across all segments, with a noteworthy trend in the rising popularity of homestays.
Meetings Incentives Conferences and Events (MICE) Boost: The online travel company also noted a boost to premium segment, especially in non-leisure travel events like corporate offsites, MICE activities, and weddings during the season. “More of these events are now taking place in hotels, leading to increased demand compared to historical periods. This shift is also helping to sustain current price levels in the market,” Magow said.
The Connected Travel Feature: Similar to Booking.com’s Connected Trip feature, MakeMyTrip has introduced its own connected travel feature. However, this feature focuses on bus and rail combinations for routes with limited availability or lower frequency of trends. Magow highlighted that the online travel company is leveraging its extensive inventory strength through this feature.
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Photo credit: MakeMyTrip reported its highest-ever quarterly gross bookings, revenue, and profit on the back of strong travel demand.