Here's the one factor that helped EaseMyTrip stand out among peers

People walk under the Christmas street illuminations in Ogre, Latvia December 22. (Image: Reuters). Representational image.

When their father was conned by a travel agent while booking a trip, the Pitti brothers planned to come up with EaseMyTrip, an online travel agency (OTA) that went public today.

EaseMyTrip is operated by Easy Trip Planners Private Ltd (ETPL), and was founded by brothers Rikant and Nishant Pitti.

“My youngest brother Rikant decided to start EaseMyTrip while he was studying in school -- in the 12th grade. I was in the US, working for a bank. Rikant and Nishant started this company. Then I quit my job and started to work in the company," Prashant Pitti, whole-time Director of EaseMyTrip, told Moneycontrol.

Since 2008, when the company came into existence, the Pitti brothers have focussed on one important aspect -- no convenience fees. In fact, the reason to go public was also to highlight that EaseMyTrip doesn't charge convenience fees like other online travel agencies (OTAs).

Before they launched EaseMyTrip, the two brothers (Nishant and Rikant) opened a travel agency and built a strong network amid travel agents.

In 2011, they started EaseMyTrip. Age was a challenge for the Pitti brothers, especially, Rikant, who was only 17 when they started and the travel agents were not taking them seriously.

“The idea is more to create a value in the system. Booking air ticket is a high transaction item and by being listed, we will be able to let people know that the platform lets people book tickets without convenience fees," Pitti said.

Convenience fee is the last deduction while booking air tickets. It is in the range of Rs 150-300.

Why if other OTAs copy the idea?

“We have built our cost structure in such a way that despite not charging convenience fees, we are profitable,” he said.

“Our competitors, even after charging convenience fees, are not profitable. Imagine the difference they will have to bring about in their company to not charge convenience fees. They will have to change the entire cost structure to copy us," explained Pitti.

A report by Motilal Oswal, a broking firm, noted that EaseMyTrip is the only profitable OTA in India, over last three years, to have a good net profit margin.

While starting the company, the idea was to offer a commodity like air tickets at a cheaper price, so that they would not have to do marketing. “We don’t depend on marketing and we depend on word of mouth. Also, we have been doing this for years and it was not an overnight journey. We got this tag of no convenience fees by showing consistency in the last 11 years."

The Motilal Oswal report pointed out that EaseMyTrip has a repeat transaction rate of 86 percent.

Even in 2020, when things took an ugly turn for the entire travel industry, EaseMyTrip managed to get better booking volumes.

According to the report, EaseMyTrip’s booking volumes in Q3FY21 recovered to 70 percent of Q3FY20 as compared to MakeMyTrip and Yatra, which saw recovery of 46 percent and 44 percent, respectively.

In addition, there was a pleasant surprise for EaseMyTrip last year, said Pitti.

EaseMyTrip's EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) for the nine months from April to December 2020 was Rs 43.2 crore. Compare this with the EBITDA the year before (FY20) -- it was Rs 49.9 crore for the entire year. “We were EBITDA positive for the nine months of the COVID year," pointed out Pitti.

This is probably why the Pitti brothers were not hesitant to go public despite a tough year.

For the strong financials in 2020, Pitti gives a lot of credit to the technological innovations they came up with last year.

“Soon after the lockdown, everyone wanted to know about their refund status (of flight tickets) and the call volume went up drastically. But because of the regulations due to the lockdown, we couldn't have people in the office. We tried routing calls to mobile numbers of our agents. While everyone was grappling with this problem, we came up with another idea," said Pitti.

The idea was to disconnect calls of customers and direct them to WhatsApp messages.

“We would send a WhatsApp message saying please chat with us, and due to this, one agent could manage more than one customer at a time. While we are continuing this service, there is an addition to it," said Pitti

On the same service, customers can also get updates on flight timings and prices. "A customer can type in English/Hinglish and get a WhatsApp message with flight details as well as the list of lowest fares. It will keep pinging you whenever the rate changes," he said.

While the focus on technology will continue this year, the emphasis will be more on spreading the word about the aspect of no convenience fees as the travel industry is seeing a good pick-up, said Pitti.

“Leisure travel has opened up and there is a humongous amount of pent-up demand to travel international and domestic destinations. A lot depends on the vaccination programme, which will be the key to boost travel," said Pitti.