MakeMyTrip said there has been a “gradual recovery” in travel demand during the second quarter of this year, witnessing growth across all of its sectors, although business continues to be “significantly and negatively impacted” by the pandemic and resulting economic conditions. The company made 18.9% of the revenue in Q2FY21 that it made in Q2FY20. This is nevertheless an 3x of Q1FY21 revenue of $6.4 million. Losses in Q2FY21 amounted to $21.1 million, as compared to loss of $36.8 million in Q2FY20.
This was the first complete quarter of recovery, as restrictions on travel in India were relaxed starting June. There has been gradual week-on-week improvement, with opening up of all modes of travel and accommodation, Rajesh Mahow, co-founder and group CEO said during an investor call. “As the domestic travel industry and our business gradually continues on the path of recovery, our focus remains on balancing cost controls and investments to aid in business recovery and continue on minimizing operating losses,” the company said in a statement.
There was a surge in travel bookings in October, beginning in the second week in light of people taking weekend getaways and road trips. There is currently week-on-week improvement in bookings given that this period is peak travel season. Customers are also taking flights to tourist destinations with Goa currently being a very popular destination. “There’s no doubt that there is pent-up demand,” cofounder and executive chairman Deep Kalra said. Better testing protocols can be of huge advantage and may give people the confidence to travel, he added.
- Revenue: $21.1 million, up from $6.4 million in Q1, down 82.2% YoY
There has been growth momentum and improvement in seat capacity since June as the country was unlocked and restrictions on movement were lifted. As domestic airlines were permitted to operate to 50% of their capacitor end of June, this may lead to improvement in the coming quarter, which is peak season. “We have seen buyers behaviour changing in favour of online, improved market share by 250 basis points,” Magow said.
- Revenue fell by 76.4% YoY to $10.9 million, number of air tickets booked fell by 80% YoY
While restrictions on international travel remain in place, there are ongoing talks for establishing travel bubbles with more countries including Italy. Additionally, some international tourist destinations, including Maldives have recently opened up (citation or if its on the call, mention).
Hotels & Packages
50% of domestic hotels have resumed operations and there has been a 30% improvement in demand, driven by short-stay vacations, hygienic and safe properties, and travel packages. MakeMyTrip said it has introduced safety programs to address consumer concerns of being infected; this is audited by third-parties and consumer reviews.
- Revenue fell by 90.6% to $4.4 million, gross bookings are down by 91.5%, driven by 88.6% fall in number of hotel-room nights YoY
Demand for hotels was skewed towards premium properties (as well as homestays), while the budget segment lagged. This was because customers feel that safety and hygiene concerns are better addressed at premium properties. “We don’t know if the mix is here to stay,” Rajesh Magow said. There should be recovery in other budget groups soon, he added. To reassure customers about safety and hygiene concerns, the company has introduced contactless check-in in 500 hotels.
- Bus ticketing: Revenue fell by 81.4% You to $2.7 million, gross bookings fell by 84.0% driven by 83.2% decrease in the number of bus tickets travelled year over year
- Other revenue: fell by 71.3% You to $3.1 million, due to lower insurance income, ad income, and other ancillary revenues