NASDAQ-listed MakeMyTrip (MMT) Ltd and budget hotel brand OYO, has inked partnership whereby OYO’s inventory of hotels across India, Malaysia and Nepal will be listed on MakeMyTrip and its brand Goibibo.

MakeMyTrip says that it has around  50,000 accommodation properties in India and about 500,000 properties outside India, and OYO has about 70,000 accommodations across 230 cities.

Note that, Online Travel Agents (OTA)s such as MakeMyTrip, Goibibo and Yatra had delisted  OYO from their platforms in 2015. Last year Yatra too had inked a partnership with OYO.

Why now?

Note that, OYO has apparently changed its business model to franchising from being an aggregator earlier, and under its new model, company’s partner hotels have now converted into franchises and operate under OYO brand.  Untagging it from aggregation model, the OYO also launched self-operated hotel brand Townhouse in January 2017. OYO Townhouses are entirely operated by OYO, giving the company more control over its operations. The company has since then expanded its townhouse to ten cities including Hyderabad, Delhi, Kolkata amongst others. So, with this OYO does not pose as a direct rival to OTAs like MMT or Yatra anymore.

Also, it seems OTAs are worried and wants to up their hotel segment game, as the competition is becoming tougher. This month, Google announced that it will now allow users to compare and book hotels via its search page directly. Not only the search giant but airlines too are entering in OTA’s space. Spicejet has a new website called Spicevacations for booking hotel rooms and buying hotel packages. Spicejet’s new website says that it has more than 35,000 hotels. It looks like the hotels are only in India and they do not aggregate hotels in other countries. However, it does have holiday packages in Dubai, Male and Thailand. Indigo and GoAir also have hotels and packages websites as well. Jet Airways, on the other hand, has a number of partnerships with hotels.  Indigo has also partnered with homestay aggregator GuestHouser for holiday homes.

MMT’s Financials

For the quarter ended December 31, 2017 (Q3 FY18), MakeMyTrip reported a net loss of US $45.3 million, as its profitability was weighed down by the increase of 144.6% in marketing and sales promotion expenses, which stood at $109 million, from $44.5 million in the same quarter last year.  Hotels and packages continued to be the majority contributor to MakeMyTrips’s revenue. Revenue from the segment stood at $83.8 million, up 136.4% from $35.4 million in the corresponding quarter last year. Gross bookings for hotels and packages stood at $367.8 million up 101.5% from $182.5 million in the same quarter last year, the increase was driven by the consolidation of the ibibo Group acquired in January 31, 2017. The total number of transactions stood at 3.2 million up 115% from 1.5 million in Q3FY18. On a sequential basis, it reduced from 3.5 million to Q2 FY18.