Vipul Prakash, chief operating officer, MakeMyTrip and Goibibo

As the travel and hospitality industry limps back to normal, recovery will be a long haul for online travel aggregators. Vipul Prakash talks to Devika Singh about alternative accommodations paving the way for growth for the industry, and why the uptake of online hotel bookings in India has been slow.

MakeMyTrip reported over 60% y-o-y decline in Q3 FY21 revenue. What’s your projection for recovery?

We are dependent on several external factors and this makes it difficult for us to make projections. But for domestic leisure, we expect to reach pre-Covid levels by the end of this year. For domestic corporate, we might return to 60% of pre-Covid levels by then. International travel, however, which has been severely hit, will not see a recovery till next fiscal. Overall, we are expecting to touch 70-75% of our pre-Covid levels by December, 2021.

Although the alternative accommodations segment is witnessing an upsurge currently, it is still a niche market in India. Could this only be a pandemic-fuelled demand?

We are witnessing some trends in the aftermath of the pandemic, such as ‘drivable vacations’, which we believe will be short-lived. However, the demand for alternative accommodations such as homestays and private villas is here to stay for the long term. Though the market for these properties is very small — only 5% — the pandemic has accelerated growth of the segment, and it will continue to grow.

The uptake of hotel bookings online has been slow; it still accounts for only 20-25% of the entire market. Alternative accommodations offer avenues for growth in such a scenario. We had made 20,000 such properties live on our platform in September 2019, and this helped us tap demand as travel resumed in the country. With an eye on this segment, we have also launched features such as ‘pre-booking chat’, which connects customers to the host and helps them solve their queries about the property before making a transaction.

Why haven’t online hotel bookings taken off in India?

The shift towards online has been gradual. The current share — 20-25% bookings online — is an improvement over 10-12% three years ago. There are two-three major challenges for this segment. About 30-35% of room bookings in India go towards corporate and business travel, which is yet to move online. Secondly, 15% of bookings are made for events, conferences, meetings, which is also majorly done offline. Also, though phone bookings have reduced drastically in the country, walk-ins still account for one-fourth of the market. Hence, we see growth opportunities in getting more people online and in the corporate segment, besides alternative accommodations. To get a share of the offline pie, we recently introduced a tool for travel agents, myPartner, which makes our hotel inventory available to them for bookings.

Given the shift towards virtual events on platforms like Zoom and Google Meet, do you foresee corporate travel resuming soon?

We are aware that corporate travel will be the slowest to make a comeback. We do not expect it to return to the same level as before, at least for the next six months. However, we are overrating the impact of virtual meetings. While there is a chance that 10% of meetings will move to virtual platforms, the rest of it will stay, given the importance of the human element in businesses. Even now, we are seeing that small businesses and SMEs have started to travel, as demand from corporates remains subdued. For us, this segment will remain a focus given the fact we have a very low market share in it; much lower than our share in the B2C segment. Even if 60% of the pre-Covid business comes back in the corporate travel segment, that will give us enough opportunity to grow for the next five years.

Like e-commerce platforms, are you, too, acquiring new customers from small towns?

A lot of our new initiatives in the next 12 months are aimed at capturing small-town travellers. On the supply side, we are trying to get more inventory for places where small-town consumers travel and also listing more budget hotels. Additionally, we are looking at ways in which we can make the experience of these consumers simpler on our platform. We are mulling introducing more languages and a voice assistant feature.

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