Skift Take
Yatra’s acquisition of a corporate travel company highlights its shift towards the more profitable business travel market, especially as competition heats up in the consumer travel space. With consumer revenue dropping, Yatra is doubling down on corporate clients.
Yatra Online on Monday announced that it has agreed to acquire Globe All India Services (Globe Travels), a corporate travel services provider, for INR 1.28 billion ($15.25 million) in cash.
Yatra had earmarked up to $20 million from its India IPO proceeds for such acquisitions, which the company has earlier hinted could be a single acquisition or multiple deals.
This acquisition will add Globe Travels’ portfolio of 360 corporate customers and annual gross bookings of approximately $90 million to Yatra’s assets, the online travel company said in a statement.
Through this acquisition, Yatra expects to expand its corporate customer base in India and strengthen its market position.
Yatra expects the deal to help the company gain access to new geographies, increase market penetration and add new capabilities to its existing line of business. This would help Yatra ramp up its its service capabilities, and maximize revenue growth, the online travel company said in a stock exchange filing.
Yatra’s Corporate Travel Focus
Yatra views this acquisition as a strategic move to strengthen its position in the corporate travel segment, which grew robustly in the June quarter despite challenges in the consumer segment, according to Dhruv Shringi, Yatra’s co-founder and CEO, during the company’s recent earnings call.
Shringi also mentioned that a newly onboarded team is ramping up operations, and while the meetings, incentives, conferences, and events (MICE) segment had a modest contribution in the June quarter, early signs for the current quarter are promising.
At the earnings call, Shringi had highlighted India’s projected GDP growth of 7.2% for fiscal 2025 as a positive indicator for corporate travel demand.
Yatra reported a 5% quarterly revenue decline during the earnings, a drop Shringi attributed to intensifying price competition in the consumer business. He also hinted that Yatra would be laying off over 100 people as a cost-cutting initiative.
What Does Globe Travels Do?
Ramkrishna Forgings-owned Globe Travels, based in Kolkata, operates in corporate travel and car rentals. Yatra expects the acquisition to expand its corporate client base by 40%, adding 360 Globe customers to its current roster of over 850 corporate clients.
Through this acquisition, Yatra aims to diversify its client portfolio with minimal overlap.
This strategic move is expected to broaden Yatra’s reach across various industries. The acquisition also positions Yatra to capitalize on cross-selling opportunities, particularly in hotels and expense management, allowing the company to offer more tailored and comprehensive travel solutions.
With Globe Travels’ annual gross bookings of $90 million and adjusted EBITDA margins exceeding 20%, Yatra expects the deal to immediately boost its financial performance, with further margin expansion likely as synergies are realized.
Given that much of Globe Travels’ business is currently offline, Yatra sees a significant opportunity to integrate its Corporate Self Booking Platform, further enhancing operational efficiencies and value creation.
“This acquisition is in line with our strategy to deepen our presence in key verticals and markets, while also bolstering our corporate travel and MICE capabilities,” said Dhruv Shringi, co-founder and CEO of Yatra. “Globe Travels’ expertise in corporate travel and MICE, along with its strong service record, complements Yatra’s offerings, enabling us to deliver an even more tailored travel experience to our clients across India.”