In a groundbreaking turn of events, MakeMyTrip, a leading player in India’s travel industry, has reported its highest-ever quarterly figures for gross bookings, revenue, and profit in the third quarter of fiscal year 2024.
Record-Breaking Performance
MakeMyTrip witnessed a remarkable 22% growth in gross bookings, soaring to an impressive $2.1 billion. The adjusted operating profit also experienced a substantial surge, recording a 70% increase and reaching $33.4 million.
Insights into India’s Travel Landscape
During the earnings call on Tuesday, MakeMyTrip Co-Founder and Group CEO, Rajesh Magow, shed light on the factors contributing to this stellar performance and offered insights into India’s evolving travel narrative.
1. Infrastructure Investment:
Magow highlighted substantial investments in travel infrastructure, including airports, highways, and railways. This underscores India’s increasing prominence in the global travel market.
2. Travel Growth:
Outbound travel from India has rebounded to pre-pandemic levels, positioning India to become the fifth-largest outbound market by 2027. India’s share of global tourism receipts has surged from 0.7% in 2000 to 2% today. Additionally, the country’s domestic travel is poised to claim the third-largest spot globally by 2027.
Magow emphasized the crucial role of growing disposable income in driving demand for outbound destinations. As consumers allocate a higher percentage of disposable income to travel experiences, there is a noticeable trend of customers upgrading from mid-segment to premium offerings, both in hotels and airlines.
3. Air Ticketing Business:
Despite short-term supply challenges, MakeMyTrip maintains a robust 30% market share in the domestic air segment. The international air ticketing business has not only fully recovered but is surpassing pre-pandemic levels.
An increasing demand for business and premium economy tickets has prompted the company to enhance the booking process for business class flights. The introduction of an industry-first feature allows customers to preview visuals of cabin comfort, meals, in-flight entertainment, and other amenities.
4. Accommodation Business:
MakeMyTrip’s accommodation business, covering hotels, home stays, and packages, witnessed substantial growth both year-on-year and quarter-on-quarter. The company achieved its highest-ever single line check-in and expanded its domestic property offerings.
The growth in the homestay business, coupled with an expansion of destinations, has led MakeMyTrip to venture into spiritual tourism products.
The revenue mix from hotel and packages improved from 40% to 45%, with increased demand observed across all segments, particularly in the rising popularity of homestays.
5. Meetings Incentives Conferences and Events (MICE) Boost:
MakeMyTrip noted a boost in the premium segment, especially in non-leisure travel events such as corporate offsites, MICE activities, and weddings. This shift towards hosting events in hotels has contributed to increased demand and sustained current price levels.
6. The Connected Travel Feature:
In line with industry trends, MakeMyTrip introduced its connected travel feature, focusing on bus and rail combinations for routes with limited availability or lower frequency. Leveraging its extensive inventory strength, the online travel company aims to enhance the travel experience for users.
MakeMyTrip’s exceptional quarter reflects not only its resilience in the face of challenges but also its strategic initiatives to adapt to evolving consumer preferences and market dynamics.