MakeMyTrip anticipates the travel industry to expand in FY24.
Having reached pre-Covid level recoveries in the hotel, ground support and air segments, MakeMyTrip expects recovery in the international segment by the end of the summer quarter. Simultaneously, the company believes FY24 will be a year of growth for the Indian travel sector as a whole.
“We are out of the recovery mode and now we are entering the growth segment,” said Rajesh Magow, CEO, MakeMyTrip.
Speaking to businessline, Magow said the forecast for the Indian travel sector for FY23 was almost on track except for one quarter and the international segment which was impacted due to the visa constraints. However, that seems like the past. “The consumer sentiment, pent up demand and the pace at which markets are opening up, are all pointing in one direction and that is growth. It is safe to say that growth is the way forward and recovery mode is behind us,” he said.
Magow added that despite global pressures, India is better poised than other markets on economic parameters such as inflation, depreciation of the currency and the stock market, “and if that continues I am optimistic of the coming fiscal.”
Speaking about the levers of growth for the company he said the B2B segments, corporate segment, home stays and domestic travel have been the drivers. He expects the contribution of international travel as well as growth from wallets and loyalty point resumptions to be growth drivers in the coming fiscal. “The domestic segment has reached the pre-Covid levels, and by the end of the summer quarter or the quarter after that, we will be close to recovery of 100 per cent in the international segment, too,” Magow noted.
He said as markets open up, the company will bring back its visa and activities products. It has also started a service where people from the UAE can book any services on MakeMyTrip. The company plans to extend that service from Saudi Arabia, too. Along with this, the website’s interface is also likely to go through a change, he said.
Prior to the pandemic, intercity cabs and buses contributed to 10 per cent of the company’s growth whereas air travel and hotel bookings contributed to 45 per cent. “Currently, the ground support segment which includes buses and cab services contributes to 12-13 per cent. The air travel is back to the contribution fo 45 per cent and hotel volumes are almost there.”
The hospitality industry has been speaking about the fact that the average room rates have shot up, however, according to Magow, the contribution of its volumes is still less. “Another trend we observe is that metro cities have done well so far, but the actual growth will come from the next 20 cities, and smaller markets in India.”