MakeMyTrip, a Nasdaq-listed online company, posted profits of $593 million (IFRS) in the fiscal year ending March 2023, driven by a strong industry recovery. Although the two intervening years were the hardest hit by Covid waves, this figure was also higher than the company’s profit for fiscal year 2020, which was $512 million.
FY 2023 saw air ticketing contribute $280.1 mn to revenue (adjusted margin), with hotels and packages adding $259.8 mn. In the quarter ended September 2023, MakeMyTrip raked in $168.7 mn in revenue. While air ticketing still garnered the lion’s share of $80.3 mn, hotels and packages followed closely with $75.7 mn.
There has been a conscious effort to grow the hotels and packages part of the business, says Raj Rishi Singh, CMO and Chief Business Officer (Corporate Travel), MakeMyTrip. Five to six years ago, MakeMyTrip was known primarily for its flight product, he points out.
In the logo campaign unveiled in November this year, actors Alia Bhatt and Ranveer Singh are driving hotel bookings on the MakeMyTrip app for new users. They have been supporting the logo since the beginning of 2016.
“If you look at our last six or seven campaigns, we’ve drawn attention to hotels and taken other paths to get there,” Singh says. These itineraries included announcing new products, highlighting savings, and communicating that the platform has the widest diversity of hotels to be found in India.
“And clearly, in the last 4 or five years, the situation has changed for us. If you see the attention and remember the knowledge at the top, we are by far the leading logo in India. As a result, we have the opportunity to move forward. ” -For logo for Indians, whether for flights or hotels. The adventure paid off and the explanation for why it happened is because we stayed very consistent,” he explains.
The logo has strived to create a fresh advertisement, staying true to the Bhatt-Singh duo. Communication comes from a “unique universe,” says the marketing director.
He adds: “If you look at our ads, you’ll see that they come from the same universe and with the same celebrities. Obviously, this is paying off for us, because today’s world is very saturated. The same customer is on mobile, on TV, or connected to TV. So you actually have to spend money because media has become more expensive. The cost of a 20-second intervention, for example during a cricket match, has been almost unaffordable lately. You have a customer who is bombarded with ads. As a brand, you want to remove clutter. Nowadays, if you watch at least one movie starring Alia and Ranveer together, your first idea has to be a MakeMyTrip commercial.
“So, we don’t want to spend an additional amount of energy or investment to get rid of clutter. In this way, the transmission of the message becomes more accurate. Time and time again, we’ve found that the message we want to convey is transparently in the customer’s brain. Because the first barrier – which logo you’re talking about – is very transparent at the zero moment. Then the customer focuses on the message. Also with the existing campaign, visibility and layout with the logo. It’s excellent. When we measured the percentage of customers who understood our message, it was higher than the average for ads,” he adds.
Singh notes that a very high percentage of consumers continue to book walk-in hotels. There is a significant segment of walk-in e-bookings, and the task is to get them online. Walk-in e-booking is the top behavior, even in the 20 most sensible cities. Says. While MakeMyTrip’s campaigns lately are more aimed at urban, affluent consumers, the opportunity also exists at the first level, he says.
Post Covid Trends
Post-Covid, some trends are “a little more pronounced,” the spokesperson observes. The first thing MakeMyTrip has detected is that, at least in the richest households, there is a shift from discretionary spending to everything that is planned as essential.
“Travel is becoming a way that people are expressing themselves. When we do surveys, we also figure out that a lot of youth think that travel is a way of self development. So, it’s no longer a discretionary spend. It’s pretty much an essential for the top households. Secondly, pre-Covid people would generally take one long break and a couple of short breaks. Now it’s become one long break and a lot of short breaks. Every weekend is becoming an opportunity for us and we are clearly seeing spikes on weekends. We are seeing big spikes coming on long weekends,” he reveals.
Another is that “near” vacations are taking precedence. This goes back to weekend peaks.
“With improved infrastructure, other people are moving to new places. And because of this, the choice of housing or what we call foster families is becoming incredibly relevant,” he adds.
MakeMyTrip takes advantage of those opportunities and tailors its product offering so that other people can see nearby places.
Around Independence Day 2023, the brand announced that it had joined hands with the Ministry of Tourism to showcase 600-plus offbeat destinations. A microsite ‘Traveller’s Map of India’ provided an interactive platform for travellers to discover ‘lesser-known tourism gems within India’, picked on the basis of user preferences.
The company selected destinations based on searches made on the platform, opting for lesser-known tourist spots or popular spots only in safe pockets. A compromised segment on MakeMyTrip now lists the “lesser-known wonders of India. “It offers destinations such as Yelagiri in Tamil Nadu, Mandarmani in West Bengal, Shoghi in Himachal Pradesh, and Vengurla in Maharashtra.
“We are dialling in on this opportunity of domestic travel. That said, now international travel is also recovering. In fact, outbound travel in India is supposed to grow faster than even domestic travel. There are two or three forces driving that. Household income in the mid and top segment is growing, which basically means that there are more discretionary spends available for an outbound holiday versus an inbound holiday. The second thing is that supply is growing,” he explains.
MakeMyTrip has highlighted the rise of new foreign destinations thanks to the connectivity of direct flights. Singh cites the case of a never-before-seen destination such as Baku in Azerbaijan, which caught the attention of Indians with the opening of direct flights through Indigo.
“The third thing is that a lot of foreign tourism forums are investing in India. Whichever tourist board invests, obviously we see benefits for them,” he adds.
The latest explanation given through Singh is that several countries now exempt Indians from visas. Singh says: “The post-Covid segment looks very, very attractive. Macros look very strong, both locally and abroad. And lately we’re seeing an expansion in our platform in both cases.
New users, convergence
The logo says that it is seeing an increase in the number of new users, as well as the number of users booking multiple facilities, such as a flight and a hotel, for the same trip.
“We’re seeing a backlog of new users, those booking a hotel or flight for the first time. At the same time, we’re seeing convergence, where users book deals for the same trip. in either case,” Singh reveals.
He adds: “A third of consumers who booked a flight also booked a hotel with us for the same trip. And we continually see improvements in this.
The number of new users is also growing faster than before Covid. That increase over the past three quarters has been accompanied by advertising campaigns, Singh says, noting that there is more room for growth.
“Online hotel bookings remain an under-penetrated market. There is wiggle room to convert other people offline online. Our campaigns have been at the forefront of this change. Since we ran this campaign, we are getting a majority percentage of the first bookings online. “, says the CMO.
Singh says that although the total number has increased, the proportion of app users and non-app users has remained the same pre-Covid until now. Efforts are underway to move users who don’t use apps to the app.
Enterprise Product
MakeMyTrip offers a product, a tool called MyBiz, aimed at businesses and small businesses. It was introduced on the premise that products in the enterprise market were limited to the most sensitive layer of the company. Underneath that, it was dealt with through agents or, in the case of small businesses, through someone booking through a B2C portal, Singh says.
“We thought we could solve the problem and created a product that allows companies to access smart source pricing. Second, they must reduce prices through various reporting controls. And third, we can find a satisfying and consistent experience for workers who need to book their own travel electronically,” he adds.
More than 50,000 companies use MyBiz to manage their travel. Singh says, “This is a wonderful opportunity for us and is part of our strategic roadmap. We will continue to invest in this opportunity.
Year End
The festive season is usually a slightly slower season for travel with people spending time at home. And this Diwali also came with the World Cup in tow, keeping people home during the weekends. But there has been a healthy build back post Diwali, notes Singh – for inbound and outbound travels, across hotels and flights.
The year end is a very strong period for us. Typically it’s one of the peak periods for travel booking. And again, we are seeing really decent year on year growth,” he adds.
Branding, Media & Performance
While the focus is on gaining new customers, as is expanding the use of apps, there is a conscious effort to build the logo rather than dedicating marketing investments to functionality marketing.
“We’re much more focused on creating direct traffic than buying traffic through functionality. Second, we’re obviously over-indexed in normal users. Direct traffic and regular users – that’s how we built this business. In a way, we complement it with functionalities. When a logo is very strong in terms of consideration, the expense on functionality is also effective. Our search power will be almost 3 times greater than that of our competition simply by having a more powerful logo,” says the CMO.
MakeMyTrip has also remained consistent in building the logo, just like with their logo ambassadors. Cricket has been a mainstay.
“We still think cricket aggregates Indians. We have always been active on cricket and we haven’t changed that. Cricket still becomes a tentpole for our media planning. And I think we’ll continue to do it,” notes Singh.
But the media plan acknowledges that cricket is now watched on devices.
“We’ve shifted a lot of our cash from linear TV to connected and virtual TV. That said, we’re still spending on linear TV – it’s not that we’ve completely moved away from it, we’ve just balanced it more towards connected TV. “Secondly, moving from reach-based spending to more impact-driven spending, to impactful, iconic properties. We’ve gone from being a media outlet at your fingertips to a media outlet with impact,” the spokesperson said.
MakeMyTrip made its presence felt during the ICC Men’s Cricket World Cup, the India-Australia series and it is now also on Bigg Boss.
Dual-Brand Set
MakeMyTrip has the credit of having invested in building the category for 23 years.
“In fact, I can’t believe a category where the number one logo has as much merit over the number two logo in terms of logo recovery. This makes our spend and functionality very effective and the spending of others incredibly ineffective. To achieve the same type of acquisition in terms of functionality, a competitor logo has to invest 3-4 times,” Singh reiterates.
Other brands in contention include Goibibo, which it acquired through MakeMyTrip in 2016. When MakeMyTrip had so much influence in the market, why is it mandatory to have a second brand?
Singh explains, “Every brand works best when you have a bullseye audience in mind. And clearly India has such a large consumer base. MakeMyTrip is an all-encompassing brand, but then the tonality of engagement, the way we speak, the way our app is, it is more targeted towards a slightly affluent consumer.”
“There’s also a client with a shrinking budget. And the client with a shrinking budget is a slightly younger audience that’s developing: new workers, other people who need it but are limited by their income, and so on. Goibibo is especially addressing this opportunity. ” So, the way this app is, the experience, the listings on the app, the way we communicate about Goibibo, the channels we use, are more targeted to a younger, lower-budget audience,” he adds.
The CMO states that the interaction of two brands makes marketing a little less difficult by concentrating more accurately on each. MakeMyTrip acts as India’s all-in-one app, targeting a more affluent base of over 35s, with relatively higher and more common incomes. Ers. Goibibo remains focused on fiscal opportunity.
“There is hardly any conflict. If we also look at customer data, the difference between Makemytrip and Goibibo is incredibly small. So, it’s a two-pronged marketing strategy that will pay off,” he explains.
Internationally, the logo is lately aimed at the diaspora. In its second-largest market after India, the GCC, the logo was primarily aimed at Indians, but is now turning its attention to users from further afield. This implies another marketing strategy, the CMO points out.
So, what’s the marketing calendar for 2024?
“We will keep on building domestic hotels. That’s been our primary task for the last three to four years. We continue on that journey of moving people from offline to online. And then, when they come online, they come to Makemytrip. Our second agenda now is that we build outbound, and we invest behind that. So that when consumers booking domestic with us start going to international destinations for the first time, they use us,” he adds.
Singh assumes, “We will start to take more advantage of incoming opportunities, particularly targeting the Indian diaspora around the world. “
MN4U JUNCTION