Yatra Focuses on Corporate Travel as Consumer Business Faces Competition

Indian online travel agency Yatra continues to face headwinds with its consumer business – can the corporate travel side pick up the slack?

During the July-September quarter, the company reported a 68% year-on-year increase in gross bookings in its hotels and packages segment. The growth came from strong corporate hotel performance, as well as MICE (Meetings, Incentives, Conferences, and Exhibitions). 

“While the challenges remain in the business-to-consumer (B2C) segment, we are highly encouraged by the strong momentum we are experiencing in our corporate travel business,” said Yatra CEO Dhruv Shringi in an earnings call Wednesday.

Yatra’s air ticketing business is split evenly between corporate travel and consumer, while corporate travel accounts for about 65% of its hotel segment. 

Direct Competition in B2C

Shringi said that the B2C segment is facing “direct competition from some of the domestic suppliers to differentiate pricing on their websites and apps.” 

The issue had come up in Yatra’s last earnings call, too. The CEO had pointed out that budget airline IndiGo’s was offering exclusive discounted fares on its website and app, cheaper than what was available to third-party distribution channels. “That, I think, is the bigger and more concerning trend that we are witnessing at this point of time,” he said.  

Shringi said that IndiGo began piloting the exclusive discounted rates back in January 2024. “They have been doing this for 11 months and they have only scaled up what they’ve been doing. I think this is likely to stay.”

From Yatra’s perspective, the solution to this is to keep finding opportunities to add more value to the customer through cross-selling things like hotel, car, rental, insurance, and more.

“We would need to look at flights more as a means of customer acquisition rather than as a means of driving profitability,” he asserted.

A Look at Yatra’s Corporate Travel Offerings

During the most recent quarter, Yatra had acquired corporate travel services provider Globe Travels. In the earnings call on Wednesday, Shringi said that the acquisition added 360 corporate customers to its client base, adding to its existing roster of 850 large corporate clients. 

“This enhanced base solidifies our leadership position in the corporate travel market in India and reinforces our competitive advantage. The expanded customer base is expected to strengthen our position with suppliers, enabling us to negotiate more favorable terms,” he said. 

The acquisition is also expected to help bolster Yatra’s position in the MICE segment, an area where Globe Travels was a strong player. 

Yatra also sees the potential to scale its expense management solution RECAP in India and internationally. “In the pilot phase, RECAP has seen encouraging responses, indicating its strong potential as the cross-sell offering within our current customer base and also on a stand-alone basis. Given the significant demand and profitability, we see substantial opportunities to scale RECAP both in India and internationally,” Shringi added. 

Yatra also partnered with Dubai-based DW Travel, a large travel management company.