In The Big Chair - Dhruv Shringi of Yatra

What changed for Yatra, and online travel, over the course of the pandemic?

Obviously the pandemic has been a generational event for all. Travel being a social experience, the sector hence was one the most impacted by COVID.

At Yatra we quickly realized the enormity of the impact we were facing and survival and getting to the other side of the pandemic became our number-one priority.

Recall that India ordered a complete lockdown for two months in late March, which meant that we were looking at a zero-revenue environment for that period with no foresight as to how long this would last for and how we would emerge from this.

We significantly cut our workforce from 2,400 to circa 1,000 employees with the remaining employees taking salary cuts from 25 to 50%. Senior management took a 50% cut in salaries.

All of this helped take our fixed costs down from $2.8M pre-pandemic to $1.2M a month during the pandemic.

During the travel moratorium we hunkered down on the technology side and automated a vast majority of the manual processes in our backend systems. This has really helped us today as travel has rebounded in a big way.

We haven’t had to hire back to the extent we had trimmed our workforce because of the automation that we implemented during the pandemic. We have learnt how to do more with much less.

On the corporate side as travel has started to recover we have seen an increase in the number of inbound interest from new customers wanting to adopt a digital solution. Corporates that were in an offline mode pre-pandemic really felt the brunt of it and now there seems to be a realization and rush to adopt digital solutions for their corporate travel needs.

Even on the leisure side given that the entire country moved towards the adoption of digital on a much wider scale travel is now benefiting from the comfort and trust that has been built by the wider e-commerce sector with a wider audience.

What is the thinking behind the IPO for Indian subsidiary Yatra Online?

Yatra is a well-recognized brand in India. We believe that the IPO in India of Yatra Online’s operating subsidiary, Yatra India, will provide Yatra Online with important benefits and opportunities not currently accessible to the consolidated company.

More specifically, we expect that the IPO in India of Yatra India will enable the consolidated company to:

• Access domestic Indian institutional and retail investors who are currently excluded from investing in Yatra Online through its Nasdaq listing due to regulatory constraints.
• Expand the potential shareholder base of the consolidated company with the additional exposure to Indian capital markets and increase Yatra Online’s visibility to a larger pool of equity analysts.
• Raise capital at a potentially higher valuation thereby reducing balance sheet risk while seeking to minimize the dilutive impact and improve liquidity.

What are your key priorities for 2022?

Obviously a successful Indian IPO is at the top of the list. Other than that some of our top priorities include:

• Increasing our market share in corporate travel with new customer signings
• Increase our hotel mix in both corporate and leisure through various initiatives
• Expanding our freight initiative
• Taking our consumer business deeper into India in Tier II and Tier III markets

We see travel players within and outside of India introducing fintech style services, what’s your view on the trend?

I think leisure travel especially in a market like India for a vast majority of people is still a relatively high-value purchase, hence easy financing options through integration of fintech players will help expand the market.

Super apps continue to be highlighted as a big development to watch, how do you see this playing out?

The jury is still out on how these super apps will gain traction in the various sectors that they choose to dabble in.  Travel is obviously one of the sectors that these super apps seem to want to offer. We have seen globally the likes of Amazon try out their hand at travel and not be very successful. Closer to home we had Paytm try to do that as well but again with limited success.

So, while it may be a nice to have feature on the super app I don’t believe that super apps will replace vertical players who bring deep expertise and specialized service for the sector that they operate in.

Numerous travel companies are claiming firsts with metaverse plays, what are the best use cases you see emerging for travel?

Metaverse in my opinion is still ways away from becoming mainstream. It was a term coined at the market peak and some companies have gone to one extreme of it. We have seen what has happened to those companies claiming to be metaverse plays. So from that perspective I think it's still early days around the metaverse concept. In travel I see metaverse playing a meaningful role.

Travel is all about the experience. If we can somehow let the traveler get a glimpse of what they should expect to experience in reality it will probably have an impact on their decision making by ways of shortening planning timelines, increase spend through adjacent experiences whilst on a trip.

Hotels could also differentiate themselves through the metaverse by offering AI-driven virtual tours. But travel is an experience that is touched and felt in the real world, hence metaverse might help with the planning but ultimately it will be the on ground experience that will stay with the traveler forever.

Your merger with Ebix was called off, what other means will you look to for growth?

We have a lot of growth opportunities ahead of us as a standalone company. Travel in India is still relatively under penetrated from an online perspective versus the rest of the world so India does have some catching up to do there.

In corporate travel where we are the leaders we continue to add services on our SaaS platform such as expense management and freight, leveraging our strong relationships in travel.

Currently we have more than 700 large enterprise customers on the corporate side and we see that market growing rapidly for us given that 55% of the market is currently held by smaller players with three to five large customers each and with limited technology capabilities.

Over time we see this shifting to travel management companies like us with deep technology expertise, and COVID actually has been a catalyst for that shift.

On the infrastructure side we currently have 605 aircraft in India that fly commercially. Based on the airline order books this fleet is expected to double by 2027.

On the airport front, as well, airports are expected to double from 99 airports in 2018 to 200 in 2040 as per Government of India’s Vision 2040. Hence travel will continue to see rapid growth in India for decades to come.

In Europe and the U.S. big hotel companies are reporting large volumes of direct business, will this tip back in favor of OTAs?

The situation in the U.S. and Europe is a bit different from what it is in India. The U.S. is a chain-dominated country with lower levels of fragmentation in hotels versus Europe and India. Also regional coverage for each of the mega brands like Marriott, Hyatt and Hilton is good enough.

This is not the case in Europe, which is heavily fragmented and so is India. We know this because we have built the largest network of hotels in India, having built this inventory from the ground up.

So, in India we have actually seen an uptick in our hotel volumes since the lockdown restrictions were lifted. In addition, India is largely a mobile internet market and we have seen that mobile environments, especially in fragment markets favor intermediary apps.

What are the greatest challenges currently facing the company?

Our greatest challenge right now is waiting and watching to see when travel numbers actually hit and surpass pre-COVID levels.

As travel rebounds, what is Yatra's strategy for attracting customers back?

Over the past few years we have built from the ground up a program called eCash which acts as a loyalty program to bring customers back in the fold and also cross pollinates the corporate customer.

See, in India, given that the vast majority of domestic air travel is on low-cost carriers and the hotel market is extremely fragmented, there is no real travel rewards program in place. What eCash does is act as a surrogate for a lack of travel rewards programs across products.

There is a lot of talk about building back better from an ESG point of view - how realistic is this?

I think ESG is a very important consideration in our future planning. The millennial population and an increasing number of large corporate customers are becoming more and more aware of their social responsibilities toward reducing their carbon footprint. Toward this end, we have already started sharing the carbon footprint of the traveler at the time of booking their flights, and this data along with hotel carbon footprint data is also provided to our corporate customers for them to track and offset their carbon footprint.

Given everything that has happened in the past two years, what would you most like to change about the online travel industry?

If there is one thing that I would like to change is the level of discounting that happens in the India travel sector especially on the hotel side. In my opinion, the India customer is not loyal at all and the majority will always go for the cheapest price out there. So, by giving away room nights at a loss the OTA is only lining the pockets of the customer who may not necessarily come back for a repeat purchase.