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Rise in overseas travel by India’s middle class to drive growth for MakeMyTrip, says CEO

FE Online
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Nasdaq-listed online travel company MakeMyTrip said that overseas travel is its “big focus area” as Indians are increasingly traveling abroad.

“The big focus area for us and where Indians are going right now is overseas. Middle class has the money and is travelling overseas as it is aspirational,” MakeMyTrip CEO Deep Kalra told PTI.

Moreover, Kalra said that the rise in international travel will be higher and faster than the domestic segment.

This seems certain as 50 million Indian will be traveling overseas this year against 23 million in 2017, as per the UN World Tourism Organisation.

Indian tourists are also one of the world’s highest spenders per overseas travel. The visitor spend is expected to rise from $23 billion in 2018 to $45 billion by 2022.

MakeMyTrip also expects its share of hotels and accommodations to go up by end of 2022 from existing 54% to around 70% of its total revenue.

“By the end of 2022, 70% of our revenue will come from the hotels and accommodations segment,” Kalra said.

Further, the company earns around 33% of its revenue from air travel, he said adding that the remaining is contributed by redBus, travel insurance and experiences.

Ibibo group, which acquired bus ticketing app redBus in 2013, was merged with MakeMyTrip in 2017.

Kalra said hotels and accommodations will contribute a bigger share of revenue ahead since a lot of headroom exists in hotels. Still, only around 15% of hotels are booked online, so there is a big market to be tapped.

The company in its filing with the US Securities and Exchange Commission reported operational adjusted revenues worth $179.8 million for December 2018 quarter, 18.8% year-over-year higher from $151.4 million in the previous year.

MakeMyTrip reduced its losses to $22.1 million in the December quarter from $33.9 million in the preceding year.

MakeMyTrip has more than 60,000 domestic accommodation properties in India and more than 5 lakh properties outside India, Indian Railways and all major Indian bus operators.