Skift Take
MakeMyTrip has the burgeoning middle class and their growing wallets to thank for its recent performance.
India’s rising middle class and higher disposable income have boosted spending on discretionary services, while the growing lower middle class has bolstered domestic travel, said Rajesh Magow, group CEO of MakeMyTrip, during an earnings call on Tuesday.
Magow highlighted the impact of younger generations driving a cultural shift towards more frequent breaks.
He also noted a positive long-term outlook for outbound travel from India with fast-growing pools of first-time tourists, particularly to emerging destinations like Turkey and Kazakhstan, which have seen significant increases in Indian tourists.
“For Kazakhstan, India is now the third largest source market witnessing a threefold increase in Indian tourists compared to 2021. For Turkey, the number of tourists from India has surged 34% in the first five months of 2024 compared to same period last year,” he said.
The shift to flexible working arrangements has influenced travel behavior, with more people combining work and leisure, Magow noted. MakeMyTrip has also added new travel products and services targeting specific demographics like millennials and Gen Z.
India’s Domestic Travel Boom
Magow expects the domestic air market to improve further in the second half of the financial year.
As per a McKinsey report, India is currently the world’s sixth largest domestic travel market by spending, buoyed by the rising middle class.
The Indian domestic market could overtake Japan and Mexico to become the world’s fourth largest by 2030, Magow said. Domestic air passenger traffic in India is also projected to double by 2030, boosted by government initiatives to build infrastructure and connect underserved domestic airports.
The Numbers
MakeMyTrip reported its highest-ever quarterly gross bookings, revenue, and adjusted operating profit, with gross booking value exceeding $2.4 billion, a 22% year-on-year growth in the first quarter of fiscal 2025. Adjusted operating profit grew by 30% year-on-year to $39 million for the period ending June 30, 2024.
“We delivered these strong numbers despite the late pickup of the season for leisure travel due to general elections in April,” said Magow.
“A wide spectrum of travel products is also helping us increase our share of the wallet Indian travelers overall travel spend. We now have a lifetime transacted user base of 75 million across all our 3 brands to build stronger loyalty,” Magow said.
The company has also relaunched its flagship loyalty program, MMT Black, with new benefits to boost customer retention and loyalty. The program has been relaunched with simplified 2 tiers and new benefits such as guaranteed room upgrades and meal upgrades for participating hotels and homestays.
“Although it is early days of the new MMT Black program rollout, we have already seen improvement in the operating metrics compared to the earlier version indicating better value for our Black customers,” Magow said.
Other Key Points
AI and Technology Enhancements: MakeMyTrip introduced its the GenAI-assisted chatbot Myra on its international flight booking funnel. “We plan to make Myra more and more intelligent using consumer insights in the future,” Magow said.
Airport Ancillary Services: The OTA has introduced premium airport services such as meet and assist facilities and plans to expand this on its international funnel as well.
Regional Booking Funnel: The company has launched Tamil booking funnel on Android platform, in addition to the existing Hindi funnel, helping it to cater to new regional users and drive deeper penetration.
Accommodation Business: The OTA’s accommodation business that includes hotels, homestays and packages continues to witness strong growth. “As we improve our penetration, we continue to add more properties across the country and now offer properties in over 2,100 cities in India,” Magow said.
Corporate Travel: MakeMyTrip’s corporate travel business through its platforms — myBiz and Quest2Travel, has also witnessed strong growth. The active corporate customer count on myBiz is now over 59,700 and for Quest2Travel, the active customer count has reached 458 large corporates compared to 272 in the same quarter last year, Magow said. “We have increased the personalization quotient on the platform,” he said.