Despite incidents of safety and discomfort, Indian travellers will not be deterred: MakeMyTrip Co-Founder & Group CEO Rajesh Magow

Rajesh Magow -MakeMyTrip

Rajesh Magow Co-Founder & Group Chief Executive Officer of MakeMyTrip, does not expect unfortunate incidents related to safety and discomfort to hit India's travel and tourism industry.

Speaking to Moneycontrol in an exclusive interview, Magow said that unfortunate turbulences like cancelled flights, train accidents, or airport incidents will not stop Indian travellers from exploring.

"These are sad events. But if you go back to the pandemic years, people would say that the world will move online and not go physical at all, people will not come back to offices, and people will not travel but travel has only increased in the post-pandemic period. Public memory is short. And life has to go on," Magow said.

He added that while travel is not likely to be impacted passengers were becoming more cautious and MMT has seen a 10 percent rise in sales of its insurance products.

"People do think about mitigating risk and insurance is one way of doing it. The typical attach rates to our flights are 15-20 percent. All put together, there has been 10 percent growth across these products," Magow said. Edited excerpts:

Given that Indian domestic airlines are expanding internationally like IndiGo launching 10 new destinations, are you also looking at expanding your business in theese new markets?

There are two aspects to this. One is the outbound market where domestic has been the catalyst for recovery, and moving forward as things fall in place for all the airlines and demand rises, we do believe the outbound is going to be a growth area in the near future.

If you look at some of the reports from a longer-term perspective the 13 million trips back in 2022 are going to grow to 80 million trips by 2040. That is projected on the back of a few things. One is the supply side and the other is the demand side, which is more critical because of the rising incomes.

By 2030 India is going to add about 140 million households with more than $5,000 household income and over 50 million households with more than $10,000 annual income.

And 90 million households by 2030 will be headed by the younger generation. In addition, direct connectivity is improving. There is a good sort of demand and supply match happening.

From a trends perspective, there are new destinations for outbound travel, for example, Kazakhstan, Azerbaijan, Greece, Turkey and Cambodia. New destinations are emerging.

There is more potential demand due to rising incomes. So MakeMyTrip has a lot of focus on outbound both on the flight and hotel sides.

How many more new destinations can we expect to be added? 

As demand picks up from a destination, the airlines start adding flights. IndiGo is looking at putting a few more flights on a few more Europe routes. Air India is also looking at that as well.

We help them (airlines) with search data. Let's say searches for Cambodia are increasing then that becomes a destination for airlines to look at. That's the way they expand.

There are many destinations that have been added and they need to make sure those routes are productive. But they will keep adding more when they see demand coming in.

Do you see flights being added to China? As a market what potential do you see?

If you look at pre-pandemic and even now the trade is happening between India and China. There used to be a lot of outbound traffic because a lot of trade was happening. There was a time when smartphone companies were doing their handset trade from China.

But over time the reliance on China is coming down, thanks to ‘Make in India’. There are a lot of products being made here and this is an opportunity for India to get the same demand. India has upped the game, thanks to the ‘Make in India’ drive.

Is MakeMyTrip expanding in new geographies?

In the middle of the pandemic we launched in GCC. It has been successful and growing organically both on the hotel and flight sides. We still need to expand it to Saudi Arabia.

From the UAE, we will go to KSA. As far as the bus business is concerned for the redBus brand, we recently added Cambodia and Vietnam. And this is on top of Singapore, Malaysia, Columbia, Peru and Indonesia.

Coming to inbound, we became GDPR (General Data Protection Regulation) compliant because of which we are accessible now from many countries.

Our plan is to attract all Indians who might be spread out all over the globe to access our platform. We have 72 million consumers who have booked on our three brands.

There are further enhancements like multi-currency transactions in the pipeline. Once we have that then we will start to grow inbound.

What needs to be done to promote brand India, especially with the growing competition from markets abroad?

Inbound was the last to recover but a lot of that was to do with supply constraints because a lot of international airlines were not flying. There were operational issues with visas taking time.

But now if you look at the inbound traffic it has caught up. It was a lag effect because the industry went through a lot. The domestic market was a lot more resilient so it bounced back faster.

International borders opened late, operations were chaotic because people had left. Over the last 10 years what has happened is that word of mouth that infrastructure is improving in India has increased.

In the last couple of days infrastructure has been questioned but that was an accident (Delhi airport incident). But if you see the infrastructure improvement over the past 10 years has been phenomenal — from high-speed trains to new airports.

We have 149 airports today, which doubled in the last 10 years and it is projected that airports in the country will go up to 200 by 2030. The world of mouth is spreading that when people come to India they can have better experiences.

I won’t say we have reached the gold standard yet and we still need to do a lot more work on rails, roads, highways and airports. Industry needs to come together to continuously promote the country for inbound travel.

The tourism boards, as we interact with them, are thinking of increasing marketing to bring the same ‘Incredible India’ spirit and accelerate the effort around it.

And this will help bring inbound travel back in a bigger fashion. India has got a lot to offer from spiritual travel, mountains, beaches, and history to wellness, among others.

We have seen incidents with airlines like people left on the tarmac, stuck in planes, and roof collapse at Delhi airport. How does that impact the willingness to travel by air? 

These are sad events. But if you go back to the pandemic years, people would say that the world will move online and not go physical at all, people will not come back to offices, and people will not travel but travel has only increased in the post-pandemic period. Public memory is short. And life has to go on.

In our early days in 2001, 9/11 happened and it was said that people won’t travel by air. Within a few days people were back flying. There is a quick sort of rationalisation that happens. Also, we need to learn from accidents and prevent them proactively.

Have you seen a rise in travel insurance? Are you looking at other avenues like flight delays for insurance? What’s the contribution coming from the insurance segment?

We are offering travel insurance and seeing good traction. TripMoney has insurance, forex and consumer lending. People do think about mitigating risk, and insurance is one way of doing it. The typical attach rates to our flights are 15-20 percent.

Some of the other products have grown. We have fare and seat locks, we have trip guarantees for rail. These products have grown in parallel. All put together, there has been 10 percent growth across these products.

Last year with the collapse of GoFirst, a lot of customers had money stuck with MakeMyTrip. How much money was stuck with MakeMyTrip? Is there any plan to help with the recovery of customers' money?

As an online travel platform, our role is to help customers book and facilitate the recovery of the refunds. And this is not just about GoFirst, we have seen it with Kingfisher and Jet Airways.

Our endeavour has always been to do whatever is possible to get the recovery before the airline goes bankrupt. The moment it goes bankrupt we don't have any recourse because then the procedure of bankruptcy takes over.

How many new airlines can we expect in India in the next few years? 

There has been a consolidation. I don't know about any big airlines coming into the market. But there are many small regional airlines coming like Fly91, they were in the office the other day.

Manoj Chacko is ex-Kingfisher. So there may be a potential of 3-4 such airlines coming up. But it is going to be more regional than big airlines.