Expect biz to hit pre-Covid levels by next summer, says MMT's Rajesh Magow

In June, domestic flight bookings were 5-7 per cent of the pre-Covid-19 levels and now that has gone up to to 25-27 per cent, Magow said

The April-June quarter was a washout for travel companies. MakeMyTrip, which saw revenue in key segments fall by 90 per cent in the quarter, had to rationalise costs and lay off staff. The company is targeting new solutions for revenue growth, expanding partnerships with agents and strengthening its balancesheet, says  group CEO Rajesh Magow. Edited excerpts: 

Are you seeing any green shoots of recovery as the government eases restrictions? 

After Unlock 2.0 and 3.0, we are seeing week on week and month on month improvement in business. In June, domestic flight bookings were 5-7 per cent of the pre-Covid-19 levels and now that has gone up to to 25-27 per cent. Hotel bookings have moved from single digits to low double digits. Bus and ground transport business is now at 10-15 per cent. With the latset announcement of easing of inter state travel, things will only improve.  Yes, we are seeing green shoots.

The Covid-19 pandemic will change the way people travel. What changes do you see coming and when do you expect to business reach pre-Covid-19 levels?

In the short term, I don't see large group travel taking place. The trend will be more on small short haul trips with families and friends travelling together. We are already seeing this trend with bookings for resorts and hill stations. The recovery will be led by domestic travel and by next March I hope the business to reach 50-70 per cent of pre-Covid-19 levels. For international travel, creation of travel bubbles is encouraging. We could see travel to destinations like Maldives or UAE.  However, it will be a slow and gradual ramp up in international travel. I am optimistic that business would be back to pre-Covid-19 levels by next summer as we would have a vaccine by then.

What advantages do you see in the B2B platform announced today? 

The platform allows us to expand reach. The decision to create a platform enabling offline agents to access our travel inventory is not linked to Covid-19. We have taken a long-term view keeping in mind customer behaviour. Around 20 per cent of hotel bookings in the country take place through offline agents and that is an opportunity for us. We are making it easier for offline agents to fulfill travel demand.

With the core travel business still at 10-20 per cent of the normal level, how will MakeMyTrip grow its revenue? 

We have built an advertisement technology platform for third party advertisements on our website and app. This would allow our travel partners (airlines or tourism boards) advertise on our site and help us earn a fee. We are also expanding our Trip Money platform to cover non-travel lending like consumer loans and insurance. Through this platform we have helped our customers avail  travel related loans from banks and NBFCs and now are expanding it. We provide credit evaluation to banks and NBFCs based on our credit rating system.

MakeMyTrip had cash and deposits of $ 174 million as of June end. How do you propose to deploy them. Any plans for distress acquisitions? 

In addition to the $174 million on our balance sheet, we have access to a credit line of $100 million. Our idea and focus now is to build a buffer and keep the balance sheet strong for organic needs and new initiatives, which we are building in the company.

Given that Chinese company Ctrip is the largest shareholder in MakeMyTrip, have there been any discussions or decisions on continuing the relationship with the Chinese shareholder following border tensions? 

Whatever be the shareholding, everything about this company is Indian - the founder is Indian, the whole business focus is on India and data is in India. There is no pressure on us. At a country level there is an issue and the government will deal with it. On our part, we are focused on our business and I do not believe there are any concerns.