Budget hotel chain Treebo has pulled out its property listings from MakeMyTrip and Ibibo citing high commission charges, according to this ET report. The company’s CEO Sidharth Gupta told the publication that the commission fee charged by MakeMyTrip/Goibibo “ wasn’t sustainable in our model, and when we weren’t able to get it reduced, we thought it would be better for our businesses, to go our different ways.
Treebo used to list 250 properties on MakMyTrip/Goibibo portals; it had pulled out last month from these portals but continues to list on other sites like Booking.com. Expedia and Yatra, the report added.
However, the exact commission charges taken by MakeMyTrip and the amount of revenue that Treebo generates from travel aggregators were not mentioned. MediaNama has written to the company seeking more details. In a written reply to MediaNama’s queries, Sidharth Gupta, co-founder of Treebo said that “most Indian and international OTAs (online travel agencies) usually charge a commission of 12-17%. Commission charged by MakeMyTrip/Goibibo were in the 25-30% range.” He added that MakeMyTrip/Goibibo bookings accounted for 12-15% of the company’s revenue.
Note that development comes just months after both MakeMyTrip and Ibibo Group completed its merger deal worth $82.8 million. The merged entity included MakeMyTrip, goibibo, redBus, Ryde and Rightstay brands; these companies together processed 34.1 million transactions during the fiscal year 2016. More on this here.
Treebo is currently active in more than 53 cities. It also plans to expand in to business and leisure sector, from its current portfolio of budget rooms. It competes with other hotel aggregators like OYO Rooms, FabHotels, Comfy Stays, among other budget hotel aggregators. MakeMyTrip had earlier launched its own a brand of budget hotel rooms.
The company has raised more than $20 million from multiple investors:
-In July last year, it raised Rs 112 crore (~$16.7M) in a round of funding led by Bertelsmann India Investments. The round included participation from SAIF Partners and Matrix Partners India.
-In June 2015, Treebo raised around $6 million in funding from SAIF and Matrix.