MakeMyTrip expects corporate travel to be an important business segment in next two-three years.
The country's largest online travel portal is tapping corporate travel segment and this move comes in the backdrop of rival firm Yatra acquiring corporate travel specialist Air Travel Bureau.
Last week, MakeMyTrip announced the launch of its self-booking tool targeting small and medium enterprises (SMEs), accounting for around 70 per cent of corporate travel business in India.
"Our corporate business should be an important division within the next 2-3 years. Our plan is to reach out to a large segment of SMEs across all tiers of towns in India. Since the soft launch two weeks ago, around 2,400 companies have reached out. Out of this, around 1,000 companies have been registered and around 400 companies have already transacted on the platform," said Ranjeet Oak, chief business officer of MakeMyTrip.
In FY17, MakeMyTrip reported revenue of $447 million and half of this came from hotels and packages segments.
Corporate travel is a low margin business and typically travel management companies offer credit to customers. The usage of corporate credit cards for travel bookings remain low as well. As such the companies often have high receivables from their clients. MakeMyTrip, however, is not offering credit option and has devised a wallet-based payment mechanism for its customers.
"The corporate wallet is an innovative payment method where the company's administration will be able to upload an amount of their choice. Groups or individuals within the company can be given access to make payments for their bookings. Since the payment is centralised and there is an option of switching on an automated approval matrix, the need for expense reporting will go away. Control and tracking will be available at a transaction and individual employee level," Oak said.
"Our extensive research with SMEs told us that the most important factors for the selection of a travel partner are service levels, air/ hotel pricing, transparency and controls (including GST flow through). Companies are clear about the fact that credit provided by some of the corporate travel management companies comes at a cost, and lack of transparency. We are getting a great response to our customer-centric and tech-based approach for business travel," Oak claimed.