Aggressive EaseMyTrip flies into top league

Projects Rs 2,500 cr as revenue in FY17; set to become 3rd or 4th player in online travel sector

When Nishant and Rikant used to book flight tickets for their father’s frequent business trips a decade back, little did the Pitti brothers know that they would start a business with annual revenues of several hundred crores. 

EaseMyTrip, their online travel company, has projected revenues of Rs 2,500 crore by the end of this financial year (2016-17). Founded in 2008, it could well occupy the third or fourth position in the sector dominated by MakeMyTrip and partner ibibo.

Last financial year (2015-16), the company — founded by Nishant, Rikant and Prashant — clocked a revenue of Rs 855 crore. With a growing hotel and travel business, they set a revenue target of Rs 1,400 crore for FY17.

“But we have already crossed Rs 2,000 crore,” said Prashant Pitti, the eldest of the three and a director in the company.

He said the company is set to get more than expected revenues, thanks to higher than expected growth in flights and hotels business. Flight transactions also got a major boost since October last year, when EaseMyTrip started powering flight transactions at e-commerce major Paytm.

The company is entirely owned by the three brothers. “There is no fourth owner in EaseMyTrip,” said Prashant, an IIT alumnus who quit his job with HSBC in the US to join his two younger brothers to set up what was primary a B2B travel company. 

Small travel agents in the company were made partners and EaseMyTrip gave them a one-stop platform to book air tickets for their clients. These agents earlier used to have multiple accounts with different airlines, blocking capital. 

Pitty brothers shared a part of the commission earned from airlines with agents. 

With a business of Rs 33 crore in the first year, the brothers approached more than a dozen investors with their growth plans. “We were told that we are a late entrant. No investor was ready to bet on us,” said Prashant.

Companies such as MakeMyTrip and Yatra were already in the online travel space. But EaseMyTrip continued to grow. 

Nishant said the company was run frugally, managing to earn margins of approximately seven% as profits. None of the top companies in this space are making profits. 

EaseMyTrip, with close to 300 employees, operates from a building in East Delhi’s Patparganj Industrial Area. The brothers bought the building to save the recurring cost of rent. 

Unlike leading online travel brands, EaseMyTrip has not yet spent significantly on national-level marketing activities. “We did not spend a single penny to acquire customers. Our USP was that we have never charged a convenience fee on flights and therefore our business grew by word of mouth,” said Nishant.

About 80% of the company’s business comes from air tickets. The B2B business has grown but its contribution to the revenue has shrunk. During the first half of this financial year, only 30% revenue came from B2B. 

Since October, when it started powering flight tickets at Paytm, the share has come down further to 15%. Paytm’s flight ticket business is believed to have grown significantly since the launch last year, triggered by frequent cash backs.

Prashant said the company was now focusing on growing the hotels and holiday package business. “Our holiday packages are at least 10% cheaper that markets,” he claimed. 

The company has opened seven international offices to get better rates from hotels and attend visiting groups. Another area of growth they want to focus on is the corporate ticketing and MICE (meetings, incentives, conferences and exhibitions) travel.