Online travel agent MakeMyTrip has reported losses of $3.96 million for the quarter ended June 30, 2014, a significant improvement from $9.1 million loss in the same quarter last year. This is however MakeMyTrip’s seventh straight loss making quarter.
The net revenues (revenues less service costs) also saw a significant growth to $35.45 million for the quarter, registering a 36.3% growth year-on-year (YoY) from $26.01 million in the same quarter last year. Gross bookings grew by 28.8% YoY to $432.2 million from $335.5 million in the same quarter last year.
Hotel & Packages revenues surpass Air ticketing revenues
This is a significant quarter for MakeMyTrip since the Hotel & packages business has finally surpassed Air ticketing revenues for the quarter. Revenues from Hotel & packages business was at $17.87 million for the quarter, up 64.6% YoY while the revenues from air ticketing business was at $16.48 million, up 15.6% YoY. It’s worth noting that the hotel & packages segment has been driving the company’s revenue growth for the past few quarters.
The company attributed this increase in hotel & packages business to a 77.8% YoY increase in gross bookings to $150.1 million and a significant 106.5% increase in the number of transactions to 0.38 million for the quarter. MakeMyTrip mentions that the acquisition of Easytobook group in February this year also helped the growth in this segment. The growth was however offset by a decline in net revenue margin to 11.9% for the quarter from 12.9% in the same quarter last year.
The contribution of hotel & packages segment to MakeMyTrip’s overall revenues is now at 50.41% for the quarter, up from 41.75% in the same quarter last year and 39% in the previous quarter.
MakeMyTrip Group CEO Deep Kalra also noted that the quarter was a seasonally high travel quarter, particularly in the hotel & packages business and their investments in the segment over the past year has significantly helped them grow during the quarter. Remember that MakeMyTrip has made five hotel-related acquisitions until now, of which four companies were overseas.
Earlier this year, Kalra had told The Economic Times that it is actively looking for potential acquisitions to improve its existing resources. These might include travel sites in places like Middle East and South-East Asia or companies with a niche mobile technology or talent.
Ad expenses up: The company notes that its advertising expenses have also shot up for the quarter to increase this growth in its hotel & packages business. The ad expenses along with increased payment gateway charges and outsourcing fees resulted in a 28.5% increase in MakeMyTrip’s “other” operating expenses to $26.3 million for the quarter, from $20.5 million in the same quarter last year.
The increase in air ticketing business was also due to a 12.4% YoY increase in gross bookings to $282.1 million and a 16.1% YoY increase in the number of transactions to 1.1 million for the quarter. This was further helped by a marginal increase in the net revenue margin to 5.8% from 5.7% in the same quarter last year.
Air ticketing now represents 46.5% of the company’s revenues for the quarter, down from 54.8% in the same quarter last year and 56.5% in the previous quarter.
Other Revenue: Other revenues also increased by 23% YoY to $1.1 million for the quarter, from $0.9 million in the same quarter last year. This was primarily due to an increase in ad income on their sites.
Earlier in May this year, MakeMyTrip launched a wallet service, following which the cancellation amount would be credited to this wallet. MakeMyTrip’s competitor ClearTrip also introduced a wallet with instant refunds earlier this month.
Download: Press Release & Financials