Even in Q2, the lean travel period this year, the company achieved high volume growth in the air ticketing business as well as room nights in its hotels and packages, Deep Kalra, founder and group chief executive officer of MakeMyTrip, said in an interview. MakeMyTrip is selling more rooms than competitor Airbnb here, he said. Edited excerpts:
How has your homestays business performed during the covid pandemic?
It has been one of the silver linings for the covid cloud. We internally call this business ‘alternative accommodations’, and it has been something we have been doing for about six years. Prior to the pandemic, we found that it was still not mainstream and was something that either very young people or the very well-travelled segment was choosing because they had ‘been there and done that’ when it came to hotels.
We have divided this business up into two parts: leisure and guest houses or managed apartments mostly for long-stay corporate travellers. Our leisure category in homestays has gone through the roof for obvious reasons. We recovered at 150% in leisure or premium homestays between October last year and this year. However, for obvious reasons, the other part of the managed apartment business did not grow much. Overall, we grew 50% from the year before in the entire homestay business in the same period. So, it’s one of those rare segments where the growth has been more than the growth in those shopping online. Homestays have evolved into a preferred option for those who can afford a hotel but would rather do a homestay. I think it’s here to stay.
How much does experience matter in a homestay?
Once you’ve seen the benefits of homestays, I don’t think you go back (to hotels) that easily, especially if you find a good one. But I’ll caveat all of this by saying, though I’m in the trade, if you have one bad experience, you will not stay in a homestay again.
Which locations did better for homestays?
Ladakh saw about 200% growth in the pandemic. Goa has always been a strong homestay market. Wellington, Tamil Nadu, and the northeast also did well for us. We also saw some good growth in Mukteshwar. For now, we segregate the business by city, and there is a tab for homestays and listings are also interspersed with hotels as people are often not aware of the options.
There are behemoths such as Airbnb and Oyo that are established in this space. How do you intend to compete with them?
We obviously entered this game a little later. We do get market intelligence that tells us that in many markets, we’ve actually pipped Airbnb of late, but these things are dynamic. We starred the platforms, not just Airbnb. But in some cases, you may not always get availability when booking. Our big focus is on that. We also onboarded more than 8,000 first time hosts onto the platform during covid itself and have about 30,000 homestays listed now. We don’t even take a commission from the hosts. It’s a small markup fee that goes to customers.
Airbnb is obviously a fantastic company, there’s no question, but I think there’s space for both. However, in India, I think we have a huge advantage in terms of our brand. The average person in India probably doesn’t even know Airbnb, and we are selling more homestays in India than Airbnb. That’s what our research tells us.
How is business travel picking up?
Business travel is still muted. People who need to meet, say their traders, retail stockists and wholesalers in the fast-moving consumer goods, pharma segments are travelling. However, a lot of the other companies or MNCs are not doing so. We see that Indian companies are sending people to factories where you typically have guest houses.
Is domestic travel, which got a boost during covid, here to stay?
People have discovered our own country, and I think that’s been awesome. Even as international travel keeps growing as more countries open up, it doesn’t cannibalise on domestic tourism much. I think we will go back to some people making multiple international trips a year and multiple domestic trips while some other people will do one international one and many domestic trips a year.
The pandemic has also accelerated the growth of a few things. Among those has apparently been the doubling of the number of internet buyers in India. Travel hasn’t had the full impact of that yet.
Are higher hotels and ticket prices a source of worry?
It’s demand and supply, and that’s the reality. We’ve conveniently forgotten when they were throwaway fares, and tariffs and a lot of these businesses had to go through a lot of toils during that time. But on hotels, you could become a homestayer, and you won’t have to pay crazy prices.
On airfares, I also believe we need more capacity. So, the kind of airfares you’re seeing in the UK or US is crazy. I do hope that either we have scheduled flights coming back or we have a lot more bubbles because otherwise, these airfares are really tough.
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