 "MakeMyTrip aims for the stars to boost hotel chain")
MakeMyTrip wants you to know that the company is all about hotels now. It has changed its logo, introduced new travel features and even done what it never did before: rope in celebrity endorsers. This comes a year after its last branding exercise where it had introduced a new tag line called 'Dil Toh Roaming Hai'.
Why is one of the market leaders in airline ticketing pivoting to hotels and burning a whole lost cash to tell you this?
One possibility is that MakeMyTrip has been struggling to become profitable. In the third quarter of 2015-16, the Nasdaq-listed company recorded a loss of $19.5 million (about Rs 130 crore). Last year, the company's market capitalisation halved to just under $600 million; it has now risen to $800-odd million. If any company needs an overhaul in strategy, it is MakeMyTrip.
Its primary business, airline ticketing, means thin margins and very little chance of making money. So, in October, MakeMyTrip expelled OYO and Zo Rooms from its website and launched Value+. A branded hotel chain just like OYO and with a similar USP: affordable and reliable hotels. MakeMyTrip will tell you that bad customer experience in OYO was damaging the brand and that's why it made the switch. Value+ has been growing steadily but MakeMyTrip remains synonymous with ticketing.
So, the company has now decided to turn the conversation to its hotel chain and for that they roped in actors Ranveer Singh and Alia Bhatt.
"We roped in celebrities to make the brand aspirational while not losing the value-for-money tag," said Saujanya Shrivastava, chief marketing officer, MakeMyTrip. He added that the duo give the brand a fresh look and help them appeal to younger customers. "Young is the sweet spot. Older customers like to feel young and the young relate to it, which made us pick these two," said Shrivastava. The logo change, after 15 years, lends itself to the app.
But what drove MakeMyTrip to chase the hotel chain and the "high decibel" campaign was a Millward Brown report, which stated that 28-29 per cent customers in India preferred to walk into hotels without reservations. This number is what MakeMyTrip wants to capture. "The campaign will also make sure that the fence-sitters and late adopters get on the platform," said Shrivastava.
He explained that even though deals and discounts lend to a sense of euphoria, a 360-degree solution lends stickiness. The company even introduced a DIY (do it yourself) holiday feature to increase participation. MakeMyTrip is also in the process of introducing a route planner feature, which will help customers map the best, and most economical, route from one point to another, a getting in and around just like Lonely Planet did. But why is all of this coming now? The app-led economy took off in the first half of 2015. Companies scurried to make themselves "future ready", did MakeMyTrip miss the connection? Shrivastava disagrees. "We have been investing serious money on our app infrastructure. In the third quarter of 2015, 60 per cent of our transactions were on mobile," he said.
Rajesh Magow, co-founder and CEO-India said in a statement, "At MakeMyTrip, we have witnessed phenomenal growth in our India standalone hotels business. In fact, in Q3 2015-16 alone, the transactions for standalone hotels booked on mobile increased by 756.4 per cent year-on-year. We believe that this is just the beginning. The Indian hotels market is still highly under-penetrated and fragmented and we have made aggressive efforts to tap into this segment. Our current campaign is also reflective of our larger business strategy of rapidly growing our hotels business."
The ad campaign will announce itself during the IPL, spill over into print, outdoor, radio and digital media. The company will be running two different ads of 45 seconds each. The duo has signed a multi-year contract and more campaigns will be on the way. "It will be everywhere. On every channel. You will not miss it," Shrivastava said. Its investors will hope that this new aggressive attitude isn't a miss either.
Why is one of the market leaders in airline ticketing pivoting to hotels and burning a whole lost cash to tell you this?
Read more from our special coverage on "MAKEMYTRIP"
One possibility is that MakeMyTrip has been struggling to become profitable. In the third quarter of 2015-16, the Nasdaq-listed company recorded a loss of $19.5 million (about Rs 130 crore). Last year, the company's market capitalisation halved to just under $600 million; it has now risen to $800-odd million. If any company needs an overhaul in strategy, it is MakeMyTrip.
| THE TRIP SO FAR |
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Its primary business, airline ticketing, means thin margins and very little chance of making money. So, in October, MakeMyTrip expelled OYO and Zo Rooms from its website and launched Value+. A branded hotel chain just like OYO and with a similar USP: affordable and reliable hotels. MakeMyTrip will tell you that bad customer experience in OYO was damaging the brand and that's why it made the switch. Value+ has been growing steadily but MakeMyTrip remains synonymous with ticketing.
So, the company has now decided to turn the conversation to its hotel chain and for that they roped in actors Ranveer Singh and Alia Bhatt.
"We roped in celebrities to make the brand aspirational while not losing the value-for-money tag," said Saujanya Shrivastava, chief marketing officer, MakeMyTrip. He added that the duo give the brand a fresh look and help them appeal to younger customers. "Young is the sweet spot. Older customers like to feel young and the young relate to it, which made us pick these two," said Shrivastava. The logo change, after 15 years, lends itself to the app.
But what drove MakeMyTrip to chase the hotel chain and the "high decibel" campaign was a Millward Brown report, which stated that 28-29 per cent customers in India preferred to walk into hotels without reservations. This number is what MakeMyTrip wants to capture. "The campaign will also make sure that the fence-sitters and late adopters get on the platform," said Shrivastava.
He explained that even though deals and discounts lend to a sense of euphoria, a 360-degree solution lends stickiness. The company even introduced a DIY (do it yourself) holiday feature to increase participation. MakeMyTrip is also in the process of introducing a route planner feature, which will help customers map the best, and most economical, route from one point to another, a getting in and around just like Lonely Planet did. But why is all of this coming now? The app-led economy took off in the first half of 2015. Companies scurried to make themselves "future ready", did MakeMyTrip miss the connection? Shrivastava disagrees. "We have been investing serious money on our app infrastructure. In the third quarter of 2015, 60 per cent of our transactions were on mobile," he said.
Rajesh Magow, co-founder and CEO-India said in a statement, "At MakeMyTrip, we have witnessed phenomenal growth in our India standalone hotels business. In fact, in Q3 2015-16 alone, the transactions for standalone hotels booked on mobile increased by 756.4 per cent year-on-year. We believe that this is just the beginning. The Indian hotels market is still highly under-penetrated and fragmented and we have made aggressive efforts to tap into this segment. Our current campaign is also reflective of our larger business strategy of rapidly growing our hotels business."
The ad campaign will announce itself during the IPL, spill over into print, outdoor, radio and digital media. The company will be running two different ads of 45 seconds each. The duo has signed a multi-year contract and more campaigns will be on the way. "It will be everywhere. On every channel. You will not miss it," Shrivastava said. Its investors will hope that this new aggressive attitude isn't a miss either.