Even in the second quarter, the travel restriction period this year, the company saw strong volume growth in the airline ticketing industry as well as overnight stays in its hotels and packages, said Deep Kalra, group founder and CEO. MakeMyTrip, in an interview. MakeMyTrip sells more rooms than its competitor Airbnb here, he said. Edited excerpts:
How was your homestay activity during the covid pandemic?
He was one of the silver liners of the covid cloud. We internally call this business “alternative accommodation,” and it’s something we’ve been doing for about six years. Before the pandemic, we found that this was still not the mainstream and that it was something that the very young or the very well-traveled segment chose because they had ‘been there and done that’ in terms of concerns hotels.
We have divided this business into two parts: leisure and guest houses or apartments managed primarily for long-term business travelers. Our host family leisure category has exploded for obvious reasons. We recovered 150% in leisure or premium host families between October of last year and this year. However, for obvious reasons, the other part of the managed apartment business has not grown much. Overall, we have increased by 50% over the previous year in all homestay activities during the same period. It is therefore one of those rare segments where the growth has been greater than the growth of online shopping. Host families have become a preferred option for those who can afford a hotel but prefer to stay with locals. I think he’s here to stay.
How important is the experience in a host family?
Once you’ve seen the benefits of host families, I don’t think you return (to hotels) that easily, especially if you find a good one. But I’m going to put all of that on guard by saying, although I’m in the business, if you have a bad experience, you won’t stay with a host family anymore.
What places have done better for host families?
Ladakh has seen about 200% growth in the pandemic. Goa has always been an important market for host families. Wellington, Tamil Nadu and the North East also worked well for us. We also recorded good growth in Mukteshwar. Right now we are breaking down business by city, and there is a tab for host families and the listings are also interspersed with hotels as people are often unaware of the options.
There are behemoths like Airbnb and Oyo that are established in this space. How do you plan to compete with them?
We obviously got into this game a bit later. We’re getting market information that tells us that in a lot of markets we’ve actually been piping Airbnb lately, but these things are dynamic. We played on the platforms, not just on Airbnb. But in some cases, you may not always get availability when booking. Our big goal is on that. We also onboarded over 8,000 hosts for the first time on the platform during the covid itself and currently have around 30,000 host families listed. We don’t even take a commission from the hosts. It’s a small markup that goes to customers.
Airbnb is obviously a fantastic company, there is no doubt about it, but I think there is room for both. However, in India I think we have a huge brand advantage. The average person in India probably doesn’t even know Airbnb, and we sell more host families in India than Airbnb. This is what our research tells us.
How are business travel evolving?
Business travel is still muted. People who need to meet, say their traders, retailers and wholesalers in the fast moving consumer goods segments, the pharmaceutical segments are traveling. However, many other companies or multinationals do not. We see Indian companies sending people to factories where you usually have guesthouses.
Domestic travel, which took a boost during covid, is it here to stay?
People have discovered our own country, and I think it’s great. Even though international travel continues to grow as more countries open up, it doesn’t cannibalize domestic tourism much. I think we’re going to come back to some people doing multiple international trips per year and multiple domestic trips while others will do one international trip and multiple domestic trips per year.
The pandemic has also accelerated the growth of some things. Among these apparently is the doubling of the number of internet shoppers in India. Travel has yet to have the full impact.
Are the rising prices of hotels and tickets a cause for concern?
It’s demand and supply, and it’s reality. We conveniently forgot when it came to disposable tariffs, and tariffs and many of these businesses faced a lot of hard work during this time. But in hotels, you could become homestay, and you won’t have to pay crazy prices.
With regard to air fares, I also think we need more capacity. So the kind of airfares you see in the UK or the US is crazy. Hopefully either we’ll have regular return flights or we’ll have a lot more bubbles because otherwise these airfares are really tough.
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