These are interesting times for MMT. In a first in the Indian digital ecosystem space, MMT has tied-up with Flipkart to offer travel services on the online retailer’s platform. Also, it has recently tied up with OYO to ramp up its budget segment offerings. In midst of these potentially game-changing developments, we caught up with Ritwik Khare, Chief Business Officer – Hotel and Accommodation Supply – MakeMyTrip.com to understand what it means for the company. Excerpts from an exclusive telephonic interview:
OYO and MMT come together to leverage each other’s platform
Commenting on the decision of working together with OYO, he noted the move was backed by the conviction that OYO, in the past two years, had made a “substantial change” to its business model, evolving as a full-scale hospitality company. It is interesting to note that MMT had decided not to list OYO properties two years ago. “There has been an acute change in the business model and we have been watchful of that,” he said, explaining the rationale behind the change in the stance. He noted that the budget segment was in the need of quality supply, and OYO had brought that quality element in the budget segment. “It was imperative that we work together as they go on to add supply and we complete our supply offering,” he said. He added that they were going to continue partnering with them to give “customers a great value proposition.”
Giving his take on MMT leveraging from OYO’s international networks in Nepal and some other countries, he called Southeast Asian markets as “critical and fastest growing markets” for MMT. He noted that MMT was going to leverage from OYO’s supply and OYO was going to leverage from demand generated by MMT customers, implying that the coming together of the two entities was symbiotic in nature.
Tying up with Flipkart
In a one-of-a-kind development, MMT has decided to partner Flipkart – India’s biggest home-grown e-commerce platform – where Flipkart will sell travel services on its platform. According to reports doing the rounds, MMT, RedBus and GoIbibo will have access to Flipkart’s data to drive their online sales. “It is an important partnership for us, “Ritwik Khare said. He noted that travel was discretionary service and was “complicated on the fulfilment side, and the coming together of MMT which “owned the entire spectrum of supply side and Flipkart which had an extremely large customer base was an interesting partnership.” He shared that the development was going to unfold in the coming days, shying away from disclosing any further details.
Business after the merger
Speaking to us on life post the merger, he mentioned that both the companies had their “own areas of impetus” and each brand had their “own sweet spots.” MMT was focussing more on the four-star and upwards segment of hotels while GoIbibo was geared more towards the budget and mid segment, he explained. When asked whether the merger was a right time to “press the foot off the pedal on the discounting war”, he was quick to add that the quality of experience while using their app and post buying the product were pivotal in consumer retention. “There are enough ways of acquiring a customer, but we take great pride in the fact that we treat our customers very differently after the purchase,” he asserted.
He conceded that there was always going to be “price competitiveness in an online world” but customers were inclined to choose MMT for not only price competitiveness but also for the “ever-evolving work on the product side” and superior supply offerings.
Giving a peak in to market segregation, he shared that MMT’s hotel business was on an “all-time high”, contributing more the half of the total revenue generated by the company. He made a special mention of the “very large task” of integrating the supply systems of MMT and GoIbibo, thereby offering a hotelier the ability to not “duplicate his work” at a click of the button, and yet distribute to two of the best platforms “in terms of online sales.” “The task of integration has gone off very well and now hotels are in a place where they can reach out to customers of three brands – MMT, GoIbibo and RedBus – through a single-window,” he asserted.
Reflecting on current state of the market, he noted that “things were looking up”. He mentioned that Arif Patel from Accor Hotels had been quoted in media as saying that occupancy rates had clocked upwards of 80 percent in cities like Mumbai and Delhi.
When Asked whether only occupancy rate was the parameter to monitor the health of the industry, he noted that finding a balance between rates and occupancies was a “classical dilemma” faced by a revenue manager. Once the revenue manager was confident, it was going to start reflecting in the rates as well, he said. “It has definitely been a good year as far as occupancy increases are concerned. It will lead to rate increases in the coming future,” he added. Suggesting that hotel partners needed to “match-up rates with the right quality of service and product”, he asserted that hotels, especially, in the mid-segment needed to assure service quality to ensure realisation of higher rates.
Speaking on supply-side trends in the market, he observed that four-star and five-star hotel supply, especially greenfield, “takes its own time” and had their own investment, development and long approval cycles. He suggested that four and five-star segment supply was not “forthcoming” in the country. He added that while industry wanted to add supply, it was going to take its own course of time.
Sharing that MMT was in midst of further muscling up its alternate accommodation, he said that the budget segment market was doing very well.