Recession is the best time to build your biz: Dhruv Shringi

Interview with CEO, Yatra.com

With Travelguru becoming the fourth company to be acquired by Yatra in the past 18 months, the online travel portal is eyeing the top slot in the hotels and holidays segment. Dhruv Shringi, chief executive officer of Yatra.com, tells Ruchika Chitravanshi the company sees many more areas of inorganic growth in the future. Edited excerpts:

What was the main idea behind acquiring Travelguru and how does it help Yatra? What was the size of the deal?
We have acquired 100 per cent of Travelguru for cash. We’re not sharing the deal size number. The rationale for the transaction is that the Indian online travel industry is very heavily concentrated in the air ticketing business (domestic and international) and margins in air are continuing to be under pressure. Inventory is also being taken out with the Kingfisher (Airlines) situation. In the light of that, we decided to expand our business to other verticals beyond air. Domestic hotels is the first we have expanded into.

But are you not already into hotels?
We are already doing a bit of domestic hotels on our own but that part of our business was slightly on the weaker side. Travelguru, the largest online player for domestic hotels, greatly improves the value proposition for our customers. We can now give our customers the full bouquet of services, including access to 7,000 hotels for which Travelguru has specially negotiated rates. It also brings together the combined buying power of both the companies. From a hotel partner’s point of view, it provides a huge distribution network.

What will be the main growth area for Yatra?
Hotels and holidays will be the chief focus area. Our marketing communication has also been towards hotels and holidays. We are anyway well known for flights. We will not stop investing in that area but the incremental investment will happen on the hotels and holidays side.

What is the current division between the revenue from ticketing and the non-ticketing business, mainly hotels and holidays?
It’s still heavily geared towards air. The mix is like 80:20. We want about a third of the revenue to be from holidays and hotels over the next two years.

How are the dynamics going to change vis-a-vis competition?
It is going to change on the domestic holidays front. Travelguru and Yatra combined on the domestic holiday front will become the largest player in the segment. MakeMyTrip would be the largest player in terms of overall market share, but if you look at the hotels and holidays side of the business, especially the domestic market, we would be the largest player.

What is Yatra’s current market share?
Of the overall travel market, our share is eight to nine per cent. Among the online travel players, our market share is about a third. On the hotels side, we see our market share more than doubling now.

This was your fourth acquisition in the past 18 months. What areas are you looking at for more such acquisitions?
We will evaluate as we come across the opportunity. It is not just an acquisition play. There are areas in our portfolio where we think we can grow faster inorganically than organically. Mobile is one such area. Holidays is another.

Would you want to grow your international holidays business inorganically, too?
At the moment, that business is doing very well. We are growing at 80 per cent, year on year. We will continue to evaluate opportunity over there. If we come across something good, we will look at it in detail.

How good is this time for acquisition, given the slowdown situation in the market?
A recession is the best time to build a business because when everyone else is looking at cutting back, you can scale up at a lower cost.

How has the slowdown impacted the overall travel market?
This summer, we have seen a rebalancing of demand. It has moved from international travel to domestic travel because of the rupee depreciation, especially to short-haul destinations.