New Delhi: Online travel agencies have seen a huge rebound in travel, reporting strong results quarter after quarter. Today, nearly all segments of travel have rebounded from their pandemic lows. MakeMyTrip, one of the largest travel companies in India, has seen a significant recovery in business travel, particularly from offsites, conferences and meetings.
MakeMyTrip’s co-founder and group CEO Rajesh Magow told Mint in an exclusive interview that celebration travel has been growing consistently. This trend is likely to continue in the near future, with the March quarter and subsequent ones expected to see strong demand owing to several holidays and long weekends, he said. In the December quarter the company reported an increase in profit to $24.2 million from just $0.2 million in the same quarter of 2022.
Here are some excerpts from the interview.
High airfares have caused heartburn for travellers. Do you see that changing any time soon?
I don’t think we need to take an aggregate view on airfares. For a market like Rajasthan, which is a wedding destination, we continue to see very high rates. Maybe Goa as well. But some other destinations may not be seeing such high rates.
If we have more supply coming in, we will see prices will come under pressure. With fares — domestic or international — we forget to factor in the three or four years of inflation during the pandemic when there was little or no increase. It’s just during the last year that rates have increased. So if we were to pick up the annualised CAGR of inflation, the higher fares would make sense. The base is now set or settling at these fares and is not likely to be disturbed unless there is a slowdown.
Inbound travel from foreign countries is still nowhere close to pre-covid numbers. Are you seeing any change in that?
Inbound is the only major laggard, and not just on our platform. However, until now, we were not necessarily focusing too much on inbound travel. The main reason was that every big domestic market or region in India was doing well.
Similarly, if we look at Europe, one of the biggest regions for travel into India, that itself has been only growing as a domestic market, with people travelling far less from overseas. That has caused a lag effect. There have also been visa issues for travel into India, and some part of the slowness is due to a low supply of air seat inventory and high airfares. This segment is coming back slowly now.
Has business travel returned to pre-covid levels?
Definitely. It is growing at a very healthy rate year-on-year. Compared to pre-covid levels, business travel is back. Things like offsites, conferences and team meetings have also picked up significantly.
Within business travel, is any segment still lagging?
The bus platform. Pre-pandemic, our platform used to see a lot of bus bookings from a segment of office-goers, especially in south India. These were workers living in satellite towns who travelled to cities either every day or on weekends. That is taking more time to come back.
Many companies, including TCS, have now made it mandatory for people to come back to work full-time in the next three months. Now, maybe we will see bus travel come back too, since these large companies have a lot of workers living in satellite towns around Bangalore, Hyderabad, Chennai, Delhi, Mumbai, etc.
What are your expectations this year in terms of domestic travel? Last year a large number of global events such as the G20 kept the industry abuzz.
Generally speaking, there is good momentum from a demand standpoint, and overall consumer sentiment has been positive in terms of wanting to travel more. But within overall travel, the emerging trend is to take many short holidays, either on weekends or long weekends.
How does March look? The subsequent quarter also has the general elections. Will that slow down travel?
March has five weekends including a holiday, which is good. For every long weekend in recent quarters, we’ve been doing more check-ins than our previous record. This gives us an idea that this pattern of wanting to take short travel breaks has not gone away after the pandemic and that it is not just a one-off thing.
Short celebration holidays have also become important of late, especially in the homestay segment. However, April, May and June, which is generally not considered a seasonal quarter, will remain so.
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Published: 03 Mar 2024, 03:20 PM IST