How India Travels

January 24, 2024

Make My Trip (MMYT) is the dominant OTA in a fast-growing Indian Travel ecosystem.

Here are 5 key takeaways from Make My Trips 3Q24 Earnings report:

1)     Total bookings grew 20% YoY. 

  • Air bookings grew 18% YoY.  This comprised a 10% growth in air segments flown and an 8% increase in ticket prices.  MMYT continues to grow faster than competitors that are 1/10th its size. 

  • Hotel and package bookings grew 25% YoY.  Room night bookings grew 18% and prices grew 7% YoY. 

  • Bus ticketing booking grew 23% YoY.  Prices only grew 2% YoY, so volume growth contributed the rest.

2)     Revenues grew 26% YoY.  The Take Rate increased to 10.3% from 9.8%.  Hotel and bus take rate increased, while air take rate decreased.

3)     Total Marketing spending only grew 14% and signals falling competitive intensity. As a percentage of gross bookings, total marketing spending fell to 4.9% vs. 5.2% in 3Q23.  As a comparison, this metric was 8.8% in 3Q20.

4)     Operating income grew 248% YoY and operating margin grew to 10.6% from 3.8%.

5)     Earnings Per Share grew to $0.22 from the previous year's breakeven quarter.

These results are important because MMYT is likely a key beneficiary of secular growth in Indian travel.

How India Travels

Source: Booking.Com

Source: Booking.Com

The combination of rising incomes and the natural human desire for travel and exploration will result in significant growth in travel demand this decade. 

Source: Booking.Com

McKinsey expects the Indian outbound market growth over the next 20 years to repeat Chinese outbound growth over the past 20 years.  

Source: McKinsey

Aviation capacity measured by seats per capita is significantly underpenetrated compared to other markets.

Source: Indigo Air

With an order book of > 1000 planes, the Indian aviation fleet is likely to more than double by 2030.

Source: Cirium Fleets Analyser

Similar to aviation, the supply of rooms compared to global peers is significantly underpenetrated.

Source: Indian Hotels

Branded room supply is forecasted to grow by MSD to 2030.

Source: Indian Hotels

Both Indian and International brands are investing in upper-midmarket and midmarket room supply. Luxury room supply is forecasted to grow the slowest.

Source: Hotelivate Trends

Direct and OTA channels will be the key beneficiaries of the travel market moving from offline to online.

Source: ONDC

Make My Trip will be the key player as the growth unfolds over the next decade.

Thanks for reading.