MakeMyTrip Limited – Aug 24, 2023

The travel industry has seen a seismic shift over the past few decades, with consumers leaning heavily into online platforms to curate personalized, cost-effective, and convenient travel experiences.

Based in India, MakeMyTrip, has become a digital travel juggernaut catering to the burgeoning demands of the modern traveler. Launched in 2000, the company has transformed how people in India and beyond approach trip planning, offering services that encompass flight bookings, hotel reservations, holiday packages, and rail and bus tickets. In addition, it now provides a suite of complementary services including car hire, activities and experiences, and other ancillary travel requirements such as insurance products, foreign currency exchange, and even visa processing.

MakeMyTrip’s technology platforms now allow customers to choose from hundreds of thousands of hotels and properties around the world, leveraging promotional rates offered simultaneously by multiple travel operators in order to meet the requirements of the growing Indian middle-class travel market. The company’s platform caters to a diverse array of users, from solo backpackers to corporate travelers, as tech professionals scout for business accommodations, families plan leisurely vacations, or event managers book large venues for gatherings. MakeMyTrip’s user-friendly interface, coupled with its vast array of choices, makes it a go-to for users from different walks of life, whether they are organizing a quick weekend getaway or a multi-country tour.

From its nascent days as a start-up to its position as a dominant player in the online travel market, MakeMyTrip’s trajectory has been driven by the company’s recognition of a tech-savvy and evolving user base. It continually refines its platform, aiming for a more intuitive user experience and expanded service offerings. Simultaneously, the company is forging ahead with strategic alliances, tapping into newer markets, and leaning into data analytics to better anticipate and cater to user preferences.

MakeMyTrip was founded in 2000 by Deep Kalra and Rajesh Magow. It initially commenced operations with a focus on the non-resident Indian market in the United States, servicing the demand for air tickets. Although online travel bookings were in their infancy in India during the early 2000s, a rapidly growing internet-savvy population presented a lucrative opportunity. Seizing this, MakeMyTrip pivoted its focus to the domestic Indian market in 2005.

Starting with the launch of the Indian MakeMyTrip website, the company targeted Indian leisure and corporate travelers with services and travel products who preferred to make their own arrangements. What started as a flight booking service soon sprawled into a plethora of other travel offerings. By 2008, hotel bookings and rail tickets joined MakeMyTrip’s portfolio, and the company’s user base began to grow exponentially.

Recognizing the versatility of the digital space, MakeMyTrip started introducing other nuanced travel products. Bus bookings, holiday packages, and even cab services became part of the ever-growing product portfolio. Strategic collaborations with hotels, both premium and budget, and integrations with various transport services solidified its position as India’s go-to online travel agency.

In 2010, the company went public, with a debut on the NASDAQ, whilst also beginning its foray into international territories, setting its sights on the Southeast Asian market. Acquisitions soon followed with notable purchases including the likes of Thailand-based ITC Group in 2011 and the UAE’s Holiday Tours & Travel in 2012.

As smartphone penetration surged in India, MakeMyTrip was swift to adapt. Launching its mobile application in the early 2010s, it saw an influx of users preferring the convenience of mobile bookings. This transition led to MakeMyTrip pushing the boundaries even further, offering last-minute hotel bookings and exclusive deals for app users.

2016 was also a transformative year as MakeMyTrip merged with the Ibibo Group, another prominent name in the Indian online travel industry. This strategic move combined the strengths of brands like Goibibo, redBus, and Ryde under the MakeMyTrip umbrella, significantly expanding its user base and consolidating its market position.

By 2021, with the evolving dynamics of the travel industry, especially post-pandemic, MakeMyTrip began integrating AI and machine learning capabilities. These tools provided users with personalized travel recommendations, enhanced customer service experiences, and real-time updates, ensuring that MakeMyTrip was not just a booking platform, but a comprehensive travel companion.

Deep Kalra and Rajesh Magow are still with MakeMyTrip, serving as chairman and CEO respectively. In his current role, Kalra is involved in business strategy, policy issues, and inorganic growth opportunities, as well as representing the company in various industry forums and with the government. He is also the co-chair of the Confederation of Indian Industry’s National Committee on Tourism and Hospitality, and the vice chairman of the World Travel and Tourism India Chapter. In addition, he serves on several industry and public service boards. Kalra has also been recognized by Ernst & Young as Entrepreneur of the Year and as the most powerful Digital influencer in India by KPMG.

While Rajesh Magow has played a crucial role in multiple landmark events of MakeMyTrip over the years, including its listing on the NASDAQ and the merger of MakeMyTrip and Ibibo group. Most recently, he played a pivotal role in ensuring the company bounced back from the covid pandemic. He also serves on several industry boards and has received multiple industry awards, including being recognized by The Economic Times Human Capital Awards as the People-Focused CEO of the Year and Bloomberg’s Best CFO Award.

MakeMyTrip has been a forerunner in transforming the travel domain, creating a suite of products catering to the diverse needs of the modern-day traveler under the MakeMyTrip, Goibibo, and redBus brands, among others.

The platform provides a seamless interface for flight bookings. Be it domestic flights darting across the Indian subcontinent or international escapades, MakeMyTrip offers a wide array of options that cater to the budget traveler, the luxury seeker, and everyone in between. Customers can quickly and easily evaluate a broad range of potential fares and airline combinations through user-friendly websites. While the hotel booking segment presents a spectrum of accommodations, from luxury resorts to budget stays, coupled with alternate accommodations, which include villas, apartments, hostels, homestays, and cottages.

For those seeking more than just flights and accommodations, curated holiday packages encompass flights, hotels, sightseeing, and even meals, providing a holistic travel experience. These packages also include various travel services such as facilitating access to travel and other insurance products from third-party insurers, visa processing, airport transfer, and sightseeing. In addition, a Meetings, Incentives, Conferences and Exhibitions team offers services to organizations and other groups with planning meetings, conferences, weddings, trips, or other events.

For ground travelers, the platform’s bus and cab booking services facilitate easy commutes, both inter- and intra-city. While MakeMyTrip’s rail booking section simplifies the often-complex Indian Railways reservation system, ensuring users can secure their train seats with ease. Most recently, redBus also began offering domestic and international ferry tickets in Malaysia and Singapore.

Breaking into fintech in 2021, the TripMoney platform connects customers in India to various lenders that offer short-term credit lines to travelers. TripMoney acquired a majority interest in Book My Forex, which offers currency exchange, prepaid forex cards, cross-border remittances, as well as other ancillary products to Indians traveling abroad.

Customers can also access real-time updates, reviews, and ratings to make informed choices, along with several tools like travel calculators and itinerary generators. MakeMyTrip’s ease of use, combined with robust features like 24/7 customer support, security, and transparency, has made it a household name for online travel.

India is the most populous country in the world, yet it has an under-penetrated market for travel. The propensity and willingness to travel is steadily increasing, fueled by a growing Indian middle class. Furthermore, a growing base of more than half a billion internet and smartphone users, coupled with the country’s rapid drive towards digital adoption by its young population provides MakeMyTrip with significant growth opportunities.

The company’s hotels and packages business generally yields higher margins than its air ticketing business, consequently, MakeMyTrip intends to continue shifting its business mix towards this segment. Building on the acquisition of the Goibibo business, automation and adoption of new technologies are key investments to enable more hotel suppliers to seamlessly connect to the company’s various platforms. The company also intends to grow its package business outside India through strategic partnerships and acquisitions, as well as by strengthening relationships with key aggregators from whom it procures inventory for package products.

Expanding service and product offerings remains an important mechanism of customer acquisition, as well as a means to cross-sell higher-margin services and products. In recent years, the additions of bus and rail tickets, experiences, activities, and ancillary services have vastly enhanced user satisfaction. As a result, MakeMyTrip continues to expand options for alternative accommodation, activities and experiences, and multi-modal transportation offerings across regions.

New overseas markets are of particular focus for MakeMyTrip, particularly those with a significant non-resident Indian population and popular regional destinations that are located within a five-hour flight from India. The company has already made strides developing multilingual content and vernacular search-optimized pages following launches in the UAE and GCC countries, along with progress in Southeast Asia and South America following its acquisitions of the ITC Group and ibibo Group, respectively.

Activity in the GCC has extended to the recent launch of the myPartner B2B2C platform where MakeMyTrip offers both flight and accommodation bookings via partners, which now stand at close to 40,000 and are expanding each quarter. In addition, the company is increasing its focus on gaining a greater share of the corporate travel wallet as new capabilities such as automated integration to multiple HRMS and Expense Management platforms reduce onboarding time for corporates and simplify overall travel and expense management for employees.

MakeMyTrip has embarked on an impressive recovery from the covid pandemic. The company delivered its highest-ever annual gross bookings which more than doubled to a record $6.6 billion for the full year backed by robust travel demand and an evident uptick in consumer sentiment. This ultimately translated into an impressive 96% increase in total revenue of $560.4 million. The positive trend has continued in FY24 as gross bookings increased a further 80% year-over-year to $1.7 billion for the first quarter, delivering its strongest period ever, coupled with the third consecutive quarter of net profits.

Despite operating in a market fraught with macroeconomic challenges and seasonal fluctuations, profitability expansion was also strong, surging by 203% year-over-year to the highest ever in the company’s history, reaching $70.3 million for FY23. While in the first quarter of FY24, the company reported a profit of $18.6 million, in stark contrast to the loss of $10.0 million in the comparative FY23 period.

Looking ahead, consensus estimates have MakeMyTrip growing sales at a steady 20% to 24% over the next three years, delivering total revenue of $805.1 million for FY24. While analysts are also forecasting for full-year earnings per share to improve significantly from a $0.10 loss per share in 2023, turning around to a $0.60 profit in 2024.

The market for travel services and products is highly competitive. MakeMyTrip competes with established and emerging providers of travel services and products, including other online travel agencies such as Easemytrip.com, Airbnb.co.in, Booking.com, Expedia.com, traditional travel agencies, tour operators, travel suppliers and intermediaries that provide travel services. Internet search engines have also launched applications offering travel itineraries in destinations around the world, as meta-search companies can aggregate vast databases of travel search results.

A significant market development is the endeavor of travel suppliers to create direct online demand on their platforms. Airlines, particularly low-cost carriers, have been keen on either minimizing or sidestepping third-party distributors like MakeMyTrip. By directly wooing consumers through loyalty programs or eliminating processing fees, these suppliers challenge online travel agencies’ value propositions.

However, amidst this heavy competition, MakeMyTrip has built robust brand recognition, while its comprehensive service and product offerings, spanning from hotel bookings to full-fledged vacation packages, ensure that customers find a one-stop solution for their travel needs. In addition, the company’s broad distribution network, both online and offline, ensures that it maintains touchpoints with a variety of consumer segments.

MakeMyTrip has decisively transformed the travel landscape in India, rising from its humble beginnings to becoming the premier digital travel platform in the region. Capitalizing on the rapid digital adoption and growing middle class, it offers an all-encompassing range of services. The company’s adeptness in recognizing market shifts and proactively integrating cutting-edge technologies continue to set it apart even in a fiercely competitive domain.