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Monday, 09 July, 2018, 12 : 42 PM [IST]

‘The future of independent hotels & OTAs are interlinked’

The acquisition of Goibibo was a major shot in the arm of MakeMyTrip as they were able to strengthen their hold on online hotel distribution business in a big way. In the last one year since the merger, MMT has laid out an integrated hotel strategy for all brands – MakeMyTrip, Goibibo and RedBus. Ritwik Khare, Chief Business Officer – International Hotels & Global Key Accounts, in an interaction with P Krishna Kumar explains how they are investing in their platforms to enhance the customer experience as well as deliver incremental benefits to their hotel partners.

QWhat is MakeMyTrip’s hotel strategy, especially with the merger of Goibibo?
Actually, both the brands, MakeMyTrip and Goibibo, on their own were going great guns as far as hotel business was concerned. Both MMT and Goibibo had their own sweet spots of supply side benefits as well as customer segments. Hotel business is a major thrust area and it is well-defined in our GoMMT strategy for all the three brands – MakeMyTrip, Goibibo, and RedBus, after the merger.

From a hotel business standpoint, MMT will be focusing more on the upscale and above hotel business, while Goibibo will be focusing largely on the budget to mid-market brands. RedBus on their own will be targeting smaller hotels in towns and cities where bus volumes are high. Even RedBus is pushing its own Red Hotels brand for some time now. For each brand, there is a well-defined hotel strategy now. However, all the hotel inventory across categories will show up on all the three channels to help customers choose the relevant hotel based on their budget and taste.

QHow do you integrate latest technology tools into your platform to make sure your customers take right booking decision?
Overall the focus is to give a personalised selection for customers who book using our app. Today, 80% of the business come through the mobile app. But, at the same time it would be difficult for customers to browse through 2,500 or 3,000 hotels and take an informed decision for a city. Here comes our expertise, we have all the signals about the customer’s past records in terms of searches, buying behaviour, patterns, and even the kind of devices the customer use, etc. and based on these signals we throw relevant curated set of hotels to make a customer’s journey easy. Even we have the capability to give personalised choice based on the location, mobile gadget that the customer use, hand-set related data, etc.

Considering big chunk of the booking comes through the mobile app, our focus is on making the m-Commerce experience robust. We are working on all parts of that experience, starting from searching, shortlisting, buying and post-sales to create specific interventions to make the process seamless for customers. While on the search side, we try to offer curated results based on consumer’s previous search records, on the post-sale side we are integrating AI, Chat Bots, etc., for the mobile customers.

QHow GoMMT partnership will be beneficial for independent hoteliers? How would you address the trust deficit in OTA–Hotel relationship because of high commission?
I do believe that in a market like ours which operates sub- 65% occupancy levels, all the components of the eco-system need to work together to take it to 75 or 80% occupancy, and ARR by another 25 to 30%. There is enough demand yet to be tapped for each distribution channel. As far as distribution cost is concerned we are quite cognizant about it to keep it at sustainable levels based on the investment that we make in acquiring customers for our partner hotels. It should be remembered that acquiring a direct incremental customer through direct channel is an expensive proposition for hotels. Costs on any paid marketing channel is way higher than on any OTA. We feel that the future of independent hotels and OTAs are linked to each other. And if you ask an independent hotelier, distribution cost is not his biggest worry. His major worry is improving occupancy to sustainable levels.

We have 400 market managers on the ground who work shoulder-toshoulder with the hotel’s partners to bring them on board digitally, to help distribute their inventory digitally, distribute their rates digitally, etc. Another advantage that we have is our huge mobile penetration. The three brands put together have around 130 million app downloads at the last count. That is the reason why we precisely believe that we are better equipped to crack the complex hotel distribution in an equally complex Indian geography.

QWhat kind of incremental growth has the Goibibo merger brought to MMT as far as hotels and packages revenues are concerned?
Right now, across three brands, the contribution of hotels and packages stand at approximately 54% to 55%. We believe that by 2020 it can easily cross 70 to 75% with ever increasing internet penetration, increasing per capita hotel room consumption, growing outbound, etc. All these factors will help us drive that kind of growth. We believe that it is an area where we are capable of adding lot of value to our partners and consumers. Because the hotel distribution has been fragmented in the country, the consumer experience while booking online has not been that good, especially while going towards the budget segment. As we keep on addressing those challenges, we will be able to drive more business online to achieve the targeted growth in the next two years.

QWhat is the kind of opportunity that you see in consolidating the hotel inventory as part of your GoMMT strategy?
In the Indian landscape, we have upwards of 50,000 hotels listed with us which comes to around one million hotel rooms. As far as future plans in terms of consolidating the market, one big segment that we are focusing on is the alternate accommodation segment like summer homes, apartments, guest houses, villas, serviced apartments, etc. We already have 13,500 odd alternate accommodations contracted, listed and available real-time on our platform. In India, this market is yet to open up. Therefore, we are investing ahead of the market.

So the next big chunk, we expect, will come from the alternate accommodation. There are also another 30 to 40,000 budget hotels

which are not listed with OTAs. That is what our 400 market managers are trying to bring on board. We also have aggressive policies to aggregate hotels on the international side as well.

In the domestic market, we work with every brand in India. Internationally, as Indian outbound is growing, we are currently focusing on global partnerships. We have done global partnerships with Accor, Marriott and Radisson. Similar partnerships are in the pipeline with other global brands as well. People are becoming more and more confident buying international flights, hotels, activities, etc., online now. Being an Indian OTA, we have to make sure that we are the best platform to enable them to travel domestically and internationally.

QIt has been a year since MMT and Goibibo merged. How much the systems of the two entities have been integrated so far?
The integration is fully done that too quite smoothly. Through our platform we want to thank our hotel partners who cooperated with the system integration. Last year was quite hectic in that respect. We moved from two different extranets to one extranet tool, two accounting systems to one, two market management contracts to one single market management contract, etc. Moreover, the transition to GST platform also happened last year. We accomplished all these in a record time.

Our hotel partners are biggest beneficiaries of this integration. Instead of working with three different platforms, they need to list with only one Extranet. They get access to all three distribution platforms. It is a big game changer for independent hoteliers. The offers, promotions all go simultaneously on all three platforms, which is a great benefit for independent hoteliers.
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