MakeMyTrip sees big growth in corporate travel segment
Portal launches product catering to SMEs, enrolls 1,000 firms in two weeks
MakeMyTrip expects corporate travel to be an important business segment in next two or three years.
The country’s largest online travel portal is tapping the corporate travel segment and this move comes in the backdrop of rival firm Yatra acquiring corporate travel specialist Air Travel Bureau.
Last week, MakeMyTrip announced the launch of its self-booking tool targeting small and medium enterprises (SMEs), which accounts for 70 per cent of the corporate travel business in India.
“Our corporate business should be an important division within the next two or three years. Our plan is to reach out to a large segment of SMEs across all towns in India. Since the soft launch two weeks ago, 2,400 companies have reached out. Of these, 1,000 companies have been registered and 400 companies have already transacted on the platform,” said Ranjeet Oak, chief business officer of MakeMyTrip.
In 2016-17, MakeMyTrip reported revenue of $447 million and half of it came from hotels and packages.
Corporate travel is a lowmargin business and typically travel management companies offer credit to customers. The use of corporate credit cards for travel bookings, too, is low. As such, these companies often have high receivables from their clients. MakeMyTrip, however, is not offering credit and has devised a wallet-based payment mechanism for its customers.
“The corporate wallet is an innovative payment method where company admins will be able to upload an amount of their choice. Groups or individuals within the company can be given access to make payments for their bookings. Since the payment is centralised and there is an option for switching on an automated approval matrix, the need for expense reporting will go away. Controls and tracking will be available at a transaction and individual employee level,” Oak said.
“Our extensive research with SMEs told us that major factors for selection of a travel partner now have become service level, pricing, transparency and controls, including the GST flow through. Companies are clear about the fact that credit provided by some corporate travel management companies comes at a cost. We are getting great response to our transparent, customer-centric and techbased approach for business travel,” Oak claimed.
According to the Global Business Travel Association, India was the tenth largest business travel market valued at close to $30 billion in 2015 and is expected to be the fastest growing market clocking 12 per cent growth rates annually till 2020.