 "MakeMyTrip gets the show on the road")
MakeMyTrip is moving beyond deals and discounts as it hopes to get more customers to book hotels online and subscribe to its value-added products. One of the oldest players in the category, it is putting its best pitch forward and promoting the brand as one-stop destination for all travel needs.
MakeMyTrip, which has acquired rival firm Ibibo to become country’s largest online travel agency, wants to consolidate its position in a category that it helped create. At the same time, it wants to distinguish itself from the new players in the sector. For that it wants to shed its image of being a pure discounts player. Hotel booking facilities offer up the perfect opportunity. Today about 44 per cent of all domestic air tickets are booked online but online hotel booking is still nascent in India with only about ten per cent of reservations taking place online. It is a category waiting to be tapped.
The travel company’s latest campaign featuring brand ambassadors Ranveer Singh and Alia Bhatt promotes the ‘pay at checkout’ feature, a facility that has appealed to many first time users. “We have connected with our customers regularly to identify the triggers and barriers that users face while booking online. Our research revealed that a segment of customers are hesitant to pay for their hotel bookings online. In line with this we designed the campaigns with Ranveer and Alia that are based on actual user behaviour and with the aim of eliminating the pain points. The move was in line with the company’s business strategy of focusing on hyper aggressive growth and new acquisition in hotels segment,” MakeMyTrip’s chief marketing officer Saujanya Shrivastava said.
Keen to be seen as a brand synonymous with all things travel, it teamed up with the organisers of a recently held music concert in Mumbai. MakeMyTrip offered travel and hotel packages for those travelling for the concert and shuttle services at the venue. It has also launched a campaign featuring actor Diana Penty to promote its travel gift cards. While gift cards have been on offer for a few years now, the push is recent and indicates the brand’s desire to shore up revenue from value-added services. It is a way to create niche and premium extensions of the brand that help deepen customer engagement as well as find new users. The new campaign is aimed to build awareness about gifting solutions, a category that the company expects will triple in the next three to four years.
Rival firms Oyo and Cleartrip also offer the ‘book now and pay at hotel’ option. Cleartrip too recently launched a new television commercial promoting the same feature while Oyo is promoting sunrise check-in feature in hotel bookings. Clearly all travel companies have hotels on their radar, making it even more important for MakeMyTrip to differentiate itself as a brand that offers more.
According to Aloke Bajpai, chief executive officer and co-founder of Ixigo, an online aggregator that helps customers compare prices and other offers, features like pay at checkout will help portals in growing their incremental business. He says, “There is always the fear of unknown while booking a hotel room. First time online buyers are worried about the experience and service.” Bajpai says that this is akin to the popular cash-on-delivery facility offered by e-commerce companies. It addresses the issue of customer convenience and trust.
Convenience and trust are coveted characteristics. It helps build loyalty and generates word-of-mouth publicity. “Postpaid initiatives are primarily brought to reduce friction otherwise associated with online payments, and give freedom to travelers to choose any payment method they prefer. It also reduces costs as the merchant fees that the online travel agent has to pay when bookings take place on their platforms,” said Chetan Kapoor, research analyst at travel research firm Phocuswright.
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For online travel agencies including MakeMyTrip, the hotel segment is the key driver of the growth and profitability as it offers higher revenue and better margins. Hotel bookings contribute to 50 per cent of MakeMyTrip’s revenue and the company aims to increase it to 70-75 per cent in next 3-4 years. According to the company it has a share of 28 per cent in overall online hotel bookings, which is also the fastest growing segment for the company. It has seen its standalone hotels’ transactions grow 22 times in the last five years.
“All our campaigns featuring Alia and Ranveer have been well received and the same is reflected in the company results. They have played a big part in helping us meet our larger objective of driving the shift from offline to online in hotel bookings. In Q1 FY17 our campaign covering three television commercials has yielded 63 per cent year-on-year growth in new users acquired, a 59 per cent increase in total users and the highest ever hotel transactions in any given quarter,” Shrivastava said.