Indian online major MakeMyTrip’s recently launched television campaign is being viewed by many as company’s attempt to send the message that it is repositioning itself and will be treating hotel vertical as its mainstay in the future. In an exclusive conversation with TourismFirst, Ritwik Khare, Senior Vice President & Head (Business Development) – Hotels, MakeMyTrip responds to this assumption while also sharing the details of the company’s strategy to strengthen the hotel vertical. Edited excerpts:
You have recently kickstarted an aggressive television campaign featuring two current Bollywood heart-throbs for selling hotels. A popular reaction to this campaign is that MakeMyTrip has decided to position itself more as a hotel selling platform in the future than any other segment including aviation with which your growth story had begun about 15 years back. Is it the right assumption?
While the theme of the campaign is hotels and the TVCs focus on the same, MakeMyTrip remains to be a one stop destination for a consumers’ travel needs – hotels included. The campaign is in line with the company’s aggressive efforts to tap into the hotel bookings segment and further build on its leadership position, and it also aims to drive consumers to shift from offline to online for hotel bookings.
I am quite curious to understand, at what stage the company had decided to build a large portfolio in hospitality?
From the very inception of MakeMyTrip, hotels has been a very important segment. The company enjoys a 25 per cent share in the Indian online hotel booking business, according to a recent report by Millward Brown and we are focused to growing it as fast as possible. There is significant headroom to grow, as only about one-fifth of all hotel bookings is estimated to be taking place online at present.
What is the criterion you are using to select a hotel unit to be part of your inventory?
We have a strong screening process before we decide to partner with a hotel. Some of the criteria include location, amenities, customer service, etc.
Some big hotel groups are quite fond of saying that they will be developing their own robust online platforms. Are they in a denial mode of the rising might of the vibrant hotel online platforms?
There is enough and more space in the market for both players to co-exist. However, one can plan the whole itinerary and look for comparative deal, even between two hotels at the same time when on an OTA which possibly makes the experience and the number of options much wider for the user. We could always look at cross leveraging offers and discounts as being run on the pages of both. While OTA’s can highlight the discounts as being offered by hotel properties, hotel pages can possibly look at leveraging discounts available on travel , food and other amenities that could be developed into a full-fledged travel deal as provided by the OTAs.
Do you think the mobile booking will be the next big wave in the online hospitality booking in the country? What are the current trends and what changes you expect in the next two years?
The future of the online travel industry is Mobile. Today, it is a lot more convenient to book over the phone. We are confident that online penetration in hotel bookings will improve from 20 per cent to 40-50 per cent in next three or four years.
Growth of mobile internet and app-adoption in India as well as the world has revolutionized the e-commerce space. With smartphones becoming more affordable and mobile apps becoming the ‘new way’ of doing things- be it search, communication, buying or commuting, they are changing the way people shop and share experiences. At MakeMyTrip, we are keenly watching this space and are coming up with services that are available to mobile only users. On our booking apps, we have mobile-only features like the offline e-tickets and hotels near you as a result of which we see more than 50% of hotel-transactions from mobile now. We currently have over 15 million mobile app downloads to date, up from 5.5 million a year ago. The team at MakeMyTrip continues to innovate, improve our apps, and create attractive promotions like AppFest also known as the Great Indian Getaway which were a set of app only offers run for a set of consecutive days. Our quarterly repeat rate on the mobile has improved by about 30% over year ago and is about 1.5 times the repeat rate on Desktop. Put simply, there are more people using our apps for the first time; and more of those people are coming back for subsequent transactions than ever before. In summary, the underlying mobile metrics are exceeding the expectations we set just a few quarters ago. And, we think the best is yet to come which could include path breaking things such as virtual reality, usage of bit coin currency etc.
Speaking at a seminar recently, you had pointed out some content specific problems vis-à-vis online booking on smartphones. Please share some details on that and do you believe they will be expeditiously sorted out considering the growth volume?
Limited space on the mobile screen is the big challenge and the hotel display on the mobile has to change as compared to the desktop. For example, the customer reviews for the mobile display will need to be treated differently as compared to the desktop.
How do you analyse the sudden emergence of small unit or even hotel room aggregators in the country? Are they a disruptive force in a positive sense or a negative sense?
Any competition is healthy competition. The emergence of small units or budget hotel aggregators has helped open up the online hotels market in the country. We recently introduced Value+ Hotels which is a new product offering that marked the company’s foray into the quality budget hotels category. With Value+, MakeMyTrip intends to change the game by giving Make My Trip Brand assurance to the Budget Segment Consumer, and hence catalyze offline to online shift for hotel bookings.
Meta-search engines are believed to be the next big game changer in the online booking space. Have you begun partnering with them too?
We have been partnering meta search engines to ensure customers at the source of the search funnel are exposed to MakeMytrip rates. However, it is important to point out that the bulk of the demand for us comes organically and direct to our mobile app and site.
Finally, what scale you can imagine for MakeMyTrip hospitality vertical in the next two years? What more value-addition you can make to your hotel sales segment?
The hotels segment in India is underpenetrated and highly fragmented. As the largest player in the online hotel-booking segment, we have seen the market explode thanks to increasing mobile penetration and adoption, especially for last-minute hotel bookings.
MakeMyTrip has made aggressive efforts to tap into this segment. We offer the largest domestic hotel inventory with over 27,500 domestic hotels and 255,000 international hotels. We have made concerted efforts to increase our revenue share from non-air products (Hotels and Holidays. Reported as H&P (Hotels and Packages), this revenue-line has been a strategic focus area for us. We strengthened our portfolio of Hotel offerings in the South-East Asia region through two key acquisitions in 2013 – Hotel Travel Group and the ITC Group in Thailand. With the acquisition of Easytobook.com in 2014, we expanded our presence beyond South-East Asia. More recently, we bought a 25% stake in Bangalore based digital hotel marketing solutions firm Simplotel. The company recently launched Value+ that marks the company’s foray into the quality budget hotels category.
Our value proposition is that whatever be the customer need, they can find a hotel on MakeMyTrip – quicker and cheaper.