The number of rail ticket bookings on MakeMyTrip have declined sharply over the past three years: MakeMyTrip facilitated 194,856 transactions for rail tickets in 2014-15, 245,542 transactions in 2013-14 and 387,991 transactions in 2012-13, the company informed in a SEC filing. The number of transactions in 2014-15 were almost half of that in 2012-13. The NASDAQ-listed company hasn’t revealed any details about the reasons behind this decline in train ticket transactions. MakeMyTrip had first started selling train tickets on its platform in 2009, after partnering with IRCTC to access its online passenger reservation system.
Interestingly, this drop in transactions corresponds with IRCTC mandating users to have an IRCTC account before booking a train ticket through third party sites like Cleartrip, MakeMyTrip, Yatra and others.
IRCTC’s e-ticketing platform has also improved significantly over the past year or so, especially its debilitating traffic load issues. Last year, IRCTC had launched a new ticketing platform, which appears to be one that actually stays up. Apparently, the site used to face a transaction failure rate of around 30% until March last year.
IRCTC has also introduced several new payment options, including EMI, cash on delivery and has also started accepting payments through RuPay-based cashcards. IRCTC also released an Android app last year that allows users to search for and book rail tickets, check existing reservations, cancel reservations and get upcoming journey alerts.
Note that IRCTC had claimed to have clocked 1.35 crore ticket bookings in August 2013 with an average of 4.34 lakh daily bookings, up 10% from 1.23 crore ticket bookings with an average 3.99 lakh daily bookings in August 2012, as indicated by this PTI report.
MakeMyTrip revenue from rail ticket transactions
While MakeMyTrip doesn’t report revenues from train ticket transactions separately, it has mentioned in the filing that its Other Revenue primarily comprises revenue from commissions or fees from IRCTC for the sale of rail tickets, bus operators for the sale of bus tickets, fees from facilitating access to travel insurance policies to customers, and third-party advertising on its website.
For the quarter ended March 31, 2015, MakeMyTrip’s other revenue declined by 9.8% YoY to $1.23 million, from $1.37 million in the same quarter last year. This, the company said, was primarily due to a decrease in advertising revenue, which was partially offset by increase in facilitation fees on travel insurance. Air ticketing still accounts for majority of MakeMyTrip’s overall revenues, with 51.3% contribution in Q4-FY15. Revenue from the Hotels & Packages business is catching up fast, in fact it had surpassed revenues from Air Ticketing in Q1-FY15. In Q4-FY15 it accounted for 45.2% of MakeMyTrip’s net revenues.
Note: The part about MakeMyTrip not having a formal agreement with IRCTC has been removed, because it’s not clear what the exact nature of the agreement the two share is.