Overall outlook for hospitality sector is better: Yatra CEO Dhruv Shringi

Dhruv Shringi, Co Founder and CEO, Yatra
Nasdaq-listed Indian online travel company Yatra is confident of a break-even in the first quarter of FY20 as promotional cost is getting rationalised. Dhruv Shringi, co-founder and chief executive officer at Yatra, tells Ajay Modi that the company’s business will continue to expand on the back of rising corporate as well as consumer travel bookings. Edited excerpts:

How is the online hotel booking business shaping up this year?

A strong demand was visible in the first half of the year and occupancy rates improved for hotels. However, there is some turbulence in the sector in the past couple of months between some hotels and a couple of online aggregators. It could be a short-term blip. Parties on all sides realise the value each one of them brings to the table and an equilibrium will be achieved sooner or later. The overall outlook for hospitality sector is better.

What is leading to the decline in marketing spend at Yatra?

Our business travel platform has emerged as one of the largest platforms for corporate travelers in India. In corporate travel, the cost of acquisition is not directly led on consumer marketing hence we are able to rationalise some of spends. The employees of these organisations are the consuming Indian middle class. We can access them at a much lower cost of acquisition. Both these are playing well in creating a symbiotic relationship between business travel and consumer acquisition. 

What is helping the growth in corporate travel business?

Corporate and small and medium enterprises (SMEs) travel is the fastest-growing part of the business. There are about 13,000 companies in India, which account for a $10-billion annual travel spend. We have over 700 customers now and so there is more headroom for growth. More and more corporates today want to embrace technology. It makes billing process easier. There is better approval and compliance as well as pricing. More and more SMEs also see a value in our offerings.

How is the competitive intensity in online travel space given the trend of discounting? 

We have seen some rationalisation happening. MakeMyTrip and goibibo have brought down their levels of discounting, Paytm is also not aggressively discounting, especially in customer acquisition on the hotel side. The entire ecosystem seems to be moving towards rationalisation.

How is online booking experience evolving?

A lot of personalisation is being offered. Technology today allows you to build a personal relationship with the customers keeping in mind their preferences. If you have the Yatra app, your upcoming trips will start showing on the home screen frequently. You may want to reschedule or cancel from there. If you have been searching for hotels, the kind of hotels you looked for will show up higher in the order. It is about making it more convenient for the customers. The utopian scenario will be when I do not show you thousands of hotels. 

We show you three of which you may book one. That is how the offline travel bookings used to take place. The agent knew the preferences. Online travel brought transparency and power to consumers but it also brought information overload. Now, the onus is on us to sift through that overload and provide the relevant options.

Are you confident of a break-even in the next one year?   

We are getting to that stage. Our businesses today are in a relatively healthy stage. We feel that we will turn the corner in the near term and maintain profitability unless any macro event disrupts the demand.

What is the fund available on Yatra’s balance sheet?  

We have Rs 500 crore in funds. For the organic growth, we are sufficiently capitalised. We continue to look for acquisitions. We did a large one in 2017 and we continue to look out.

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