22 Sep 2015 18:44 IST

After 10 years, MakeMyTrip turns to hotels, packages to drive growth

'Focus on hotels for growth comes as the market for flights has become "somewhat mature"'

Online travel aggregator MakeMyTrip, which started operations in India 10 years ago as a platform to book flights, is now banking on hotels and packages to drive its growth.

“The hotel market, which was not moving online earlier, has now started to do so. In the online hotel booking space, we have 23 per cent market share and we want this to grow. Our focus from an investment standpoint is on this,” said Rajesh Magow, Co-Founder and CEO-India, MakeMyTrip.com.

The focus on hotels for growth comes as the market for flights has become “somewhat mature” for the company, though there is “some headroom in the relatively less penetrated international air segment”.

“Today, our hotel and packages business contributes to about 45 per cent of our revenue. This used to be only 15 per cent around the IPO time (in 2010). We want to take this to over 70 per cent in the next three years,” Magow told BusinessLine.

On how the company plans to boost hotels business, he said, “A large part of our strategy in the hotels business expansion will be organic, especially from demand and growth standpoint. The tailwinds are as more customers are shifting from offline to online.”

He said growth could also be through acquisitions if an early or mid-stage hotel aggregator reaches a critical mass.

Investments, acquisitions

In September last year, the company had set up an innovation fund for $15 million to invest in early stage start-ups. It used this to pick up stake in hotel marketing solutions firm Simplotel in January 2015.

Interestingly, its investments and acquisitions in the past one-two years have all aimed at enhancing its hotels and packages business.

In July 2015, it acquired 28 per cent stake in HolidayIQ, a travel community and holidays-planning recommendation engine.

In April 2015, it acquired certain assets of travel planning portal, Mygola.com, through the innovation fund.

In February 2014, it had also acquired Amsterdam-based EasyToBook.com to enhance its presence in hotel bookings.

Net promoter score

Apart from focussing on hotels, MakeMyTrip also aims to improve its net promoter score.

“Our net promoter score which is our customer service measurement hovers between 35 and 40 per cent but we want to take it to 55 per cent and this is also where we will be investing our money behind,” Magow said.

Recommended for you