value+

Online travel aggregator MakeMyTrip (MMT) has launched Value+, a brand of budget hotel rooms, on its website, reports ET. Value+ will offer rooms starting at Rs 1,000 per night, and was thought out because MakeMyTrip’s customers complained about the quality of services provided by budget hotel aggregators (like Oyo Rooms and Zo Rooms).

MMT also apparently sent out a 120 member team (including Deep Kalra, MMT founder and group CEO) to check hotels before it delisted budget aggregators like Oyo Rooms and Zo Rooms about two weeks ago. ET cited Rajesh Magow, CEO of MakeMyTrip as saying that aggregators were competing with its business model and that it did not make long term strategic sense for MMT to list its competitors.

Two weeks ago, MMT told MediaNama that: “MakeMyTrip has temporarily delisted Oyo Rooms  and Zo Rooms from its platform. This is a part of ongoing experiments that MakeMyTrip undertakes to help its customers make the best hotel buying decisions & get the best value for their money in the most easy & intuitive manner.”

ET adds that MMT wants to increase its hotels revenue from the current 45% to 70% in the next 3 years. As of now, MMT claims to have aggregated 1,000 hotels under Value+, and intends to double that number in a month. Value+ hotels will offer AC, satellite TV, free breakfast, free WiFi and an alleged ‘get double the money back’ if dissatisfied with services, with of course, terms and conditions apply. Hotels listed under Value+ will retain their brand and will be promoted on the Value+ brand.

It said that Oyo Rooms, Zo Rooms, FabHotels and WudStay contributed to 2-3% of MMT’s daily hotel room sales, and 10% of its bookings, and that MMT explained these reasons to the above aggregators before delisting them. MMT claims to have 27,500 hotels on its platform, while Oyo has around 3,000 and Zo around 1,000.

When delisted, Kavikrut, Chief Growth Officer, OYO Rooms, told MediaNama that “We have worked very closely with OTAs right since our inception. With OYO listings, OTAs had enabled a wider set of choices for customers who book hotels online. The move will limit this selection for their customers. OYO has seen strong growth in customers booking OYOs via our channels such as the mobile app, website and reservations helpline. The experience on these mediums is faster, direct and more convenient. Only 10-15% of our customers today choose to book OYOs via OTAs.”

MediaNama’s take: It’s the golden hour for travellers and users of online services alike. While some of the other e-services are seeing consolidation in their industries, the online hotel aggregator business has just burst onto the scene with its standardised features. This trend will see a growth because it benefits not only OTAs but also hotels, whose business might slump in certain seasons or see a dip due to other aggregators snatching customers. It wouldn’t be surprising if other big players also launch budget aggregated hotels under their brand names.