MakeMyTrip, Goibibo plan distinct travel routes for hotel, flight bookings

The country’s leading online travel agency MakeMyTrip, which acquired rival Goibibo in 2016, is planning to position the two brands as distinct from each other, catering to different kinds of customers. While MakeMyTrip is being pitched as a more premium brand, the management is placing Goibibo as an offering for value-conscious customers.

The company said it was re-imagining the whole travel space by making online travel mainstream in India like never before. “We have an interesting strategy at play with multiple brands — MakeMyTrip, redBus and Goibibo, all prominent leadership brands in their space. With the entire travelling populace as our potential customer, it is important to segment our audience and our approach to them,” said a company spokesperson.

Interestingly, the hotel tariff offered by the two brands is quite identical, though both offer discounts on bookings. Goibibo was founded in 2009 by Ashish Kashyap as a platform to compete with established players like MakeMyTrip and Yatra. Competitive pricing, helped by discounts, was a key growth driver for Goibibo. MakeMyTrip’s acquisition of Goibibo was aimed at securing a leadership position in online hotel booking space. The combined entity booked 16.3 million room nights in the first nine months of the current financial year, growing 31 per cent year-on-year. Hotels offer a high margin of 22.5 per cent to the company against a margin of 7.3 per cent in air ticketing business.

The company’s chairman & CEO Deep Kalra told investors during a recent conference call that the management was “aiming to more clearly differentiate the value propositions of both the brands, with MakeMyTrip targeting a more premium segment of the market and Goibibo aiming for a more value-conscious customer base”.

The distinct positioning is aimed at ensuring that the firm is able to appeal to a different segment of users and thereby maintain its leadership in the online travel space. “While there are overlaps, the focus audience for the two brands are different,” the spokesperson explained. 

The company maintains that Goibibo’s natural appeal is with consumers who are active seekers. “MakeMyTrip, on the other hand, has an audience with a wider profile — who seek better travel experience and the assurance of MakeMyTrip’s leadership status,” the spokesperson added.

MakeMyTrip accordingly rolled out the country’s first paid travel loyalty programme last year, charging subscribers a fee of Rs 2,499 with a promise of benefits like free cancellation of 10 domestic flight tickets (including non-refundable tickets) and 10 domestic hotel bookings. The programme, called MMTDoubleBLACK is aimed at high-frequency travellers and has so far got about 20,000 members.  

“Both Goiboibo and MakeMyTrip brands will continue to focus on developing the market in their own distinct styles as we double down our efforts of category creation and cross-promotion across brands,” the company said. MakeMyTrip is targeting high spending and repeat customers.
Nasdaq-listed MakeMyTrip earned $517 million in revenue for the nine months ended December 31, 2017, against a revenue of $327 million in the corresponding quarter of the previous year. This year's revenue is not comparable to the previous year as Goibibo was not part of the group in FY17 (even though the acquisition had been announced in October 2016).

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel