MakeMyTrip
saw its highest ever
quarterly performance in terms of gross bookings and adjusted operating profit
in the final three months of 2022 – Q3 2023 on the company’s fiscal calendar - and
the company says its future outlook is strong due in part to the Indian
government’s plans to update and build airports and highways.
Gross bookings for Q3 2023 were valued at $1.74
billion, an increase of more than 64% year-over-year. Adjusted operating profit
was $19.7 million, compared with $13.2 million in Q3 of fiscal year 2022.
In a call with analysts to discuss the results, MakeMyTrip
cofounder and CEO Rajesh Magow says India is now the third largest aviation
market globally.
“It is projected that in the next five years, government
and other private entities are going to spend up to $12 billion on the
infrastructure development of the airports. … In the last eight years, 72 new
airports have come up in the country. In coming years, air travel growth will
be driven by addition of new airports, infrastructure growth and increasing
disposable income,” he says.
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“The outlook for the aviation market is favorable, and
we expect a prolonged period of sustained growth on the back of these
initiatives.”
MakeMyTrip’s air ticketing revenue came in at $38.4
million in the last quarter, compared with $27.4 million in
the same period a year prior.
Domestic travel led MakeMyTrip’s recovery in 2022, and
domestic air ticketing has surpassed pre-pandemic levels. Magow says he is
hopeful that international travel will recover to pre-pandemic levels soon, but
there are still challenges related to high fares and a visa backlog.
Ground transportation is also a critical business for
MakeMyTrip, and Magow says government initiatives in this area will support the
growth of tourism domestically.
“World class highways are a prerequisite for fast and
seamless movement. This has been a focus area of government. The length of
national highways has gone up by more than 50% from 91,287 kilometers as of
April 2014 to more than 140,000 kilometer in March 2022.”
Magow says the Indian government has set a goal to
develop 200,000 kilometers of national highway by 2025. MakeMyTrip’s revenue
from its bus ticketing business was $19.5 million in Q3 2023, which is about
113% of the same quarter pre-pandemic.
Regarding accommodations, MakeMyTrip reports revenue
from hotels and packages was $103.3 million, up from $67.2 million a year prior.
Magow says inventory of hotels and homestays is now
comparable with pre-pandemic levels, with properties available in more than 2,000
cities.
“Similarly, for
accommodations, the outlook continues to be robust. Almost all hotel chains
have announced expansion and increasing their footprint in India," he says. "In next
couple of years, there is an estimated increase of 25% in the number of hotels
for these hotel chains.”
MakeMyTrip restarted its brand campaign on television
and digital media platforms for both the MakeMyTrip and Goibibo online travel agencies.
“After
a gap of two and half years, we launched a 360-degree campaign to capture a large
chunk of festive demand," Magow says. "That campaign focused on relevant value propositions
such as enhanced flexibility, book hotels with no upfront payment, and
numerous choices best suited to varied customer needs.”
The company’s marketing and sales promotion expenses
increased by nearly 30% year-over-year to $28.9 million in the three months
that ended in December. But CFO Mohit Kabra says the higher brand marketing
expenses were offset by efficiencies in other marketing and promotional costs, resulting
in marketing expenses coming in at about 5.2% of gross bookings in Q3 2023 versus
5.6% in the same quarter a year prior.