BackTaking a break is considered a necessity: Sharat Dhall
Yatra's president Sharat Dhall on the changing trends in Indian travel, Yatra's hotels biz and the brand's association with Salman Khan
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New Delhi: Yatra Online Pvt. Ltd, India’s second largest online travel agency, is aggressively ramping up its marketing initiatives as competition intensifies. In April, it raised $23 million (around ₹ 140 crore today) from IDG Ventures India, Vertex Venture Holdings Ltd, a subsidiary of Singapore’s state-run investment firm Temasek Holdings Pte. Ltd, and existing investors. In an interview, Yatra president Sharat Dhall spoke about the company’s future plans, including a likely initial public offering (IPO), its association with Bollywood star Salman Khan as brand ambassador and its hotel bookings business after the 2012 acquisition of Travelguru.com. Edited excerpts:
With the competition increasing rapidly in the online travel space, how do you plan to ensure your position as one of the top three travel agencies? What is your strategy?
Our focus has been mainly driving the non-air part of the business more aggressively...I think the intent was made clear when we bought Travelguru. That was a big move in pushing hard on the hotel side of the business. We really think that the opportunity on the non-air side is huge. The penetration today in online hotel bookings is in single digits. Last year the market has grown considerably as far as hotel bookings are concerned. We have been aggressive in terms of marketing as well. We have got good results on that side of the business, which has given us the feedback that we need to invest in that part. That’s what we are looking to do over next one year.
The other thing is the mobile side of the business. Nobody can get away from that end, because clearly the number of people who are accessing Internet now over mobile is far more than the number of people who are accessing it through desktop. The kind of prices that the smartphones are coming in at, the penetration is increasing and so is the ease of accessing websites. The user experience is much better. That’s another big focus for us. More than 20% of booking for hotels come from mobiles. This continues to grow month on month. These are the two broad areas where we are really looking at investing aggressively and pushing in terms of future business growth. The money that was raised earlier will be used in these areas.
As a brand, we are extremely strong and that is what drives the business and the growth despite all the competition that’s there. In terms of being in the top three, the numbers are clear. We are larger than the number three by a large margin, almost twice as large.
You have recently launched a new TV commercial series. How has it worked for you? What about your engagement with actor Salman Khan?
We have been associated with Salman for more than two years now. As a brand, all our researches tell us, we are fairly well associated with Salman and we have got good mileage out of that. We are really looking at Salman continuing as a brand ambassador for us. In the case of our new campaign, we were looking at more proposition-led thing. We looked at trends focused on hotels. One of the things that we picked up was a lot of people end up staying with friends and family when they travel rather than looking at hotels. We thought it was a good way to present offerings and discounts at hotels and thus we came out with a film saying ‘Ehsaan mat lo, discount lo’ (don’t take favours, take discounts). So it is built on consumer proposition and insight that is there. However, it hard to put an ROI (return on investment) on it. That’s the thing with marketing; you don’t know which part of it works. Overall, as long as you find that your business is growing, and the areas that you want to focus on are doing well, then broadly you must be doing something right.
Earlier the company said it is looking to cross $1 billion gross booking mark this fiscal year. How is it coming out to be and what is your projection for the next fiscal year?
Clearly this year, the goal is to get a billion in sales. I think, the business has been growing in excess of 50%. That’s the bare minimum we will look to grow. We are hoping that the hotels part of the business scales up faster than that. The last couple of years had been slow. We are hoping that with the economic sentiment picking up, there will be more growth in the market as well. Our projections for growth would be far more aggressive than what it had been in the last couple of years. We would push more aggressively next year.
What is your strategy on the hotels side? How the segment HAS grown after your acquisition of Travelguru two years back?
Our air is about 65-70% and the rest is non-air, including packages, hotels. The hotels business has grown dramatically in the last two years. (On a) year-on-year basis, this year we will grow at about 150% on our hotels business, last year we grew over 100%, so the segment is more than doubling every year. But we still think the penetration levels are really low, which is why we have been investing aggressively on this. We have about 17,000 hotels in India. We add new hotel chains or new hotels in our existing hotel chains as and when the inventory comes up. But more importantly, we are pushing hard to get into smaller towns and smaller hotels in cities. For instance, in Delhi we have 1,200 hotels which are listed. We are now covering more than 500 cities. By March, the idea is to get more than 25,000 hotels listed on our site. We see a huge market as far as mid-segment hotels are concerned. People looking for clean rooms with all the basic facilities is a very strong proposition online.
Are you planning an IPO?
IPO is not the end goal. I think the focus is really about how do you invest and grow the hotels part of the business. I think IPOs are all means to the end. It is not the milestone that we have to achieve by so and so time.
Has the way Indians travel changed?
The way Indians travel is changing. We are clearly seeing a trend where Indians are far more experimentative in terms of their choice of destination. It is different from the time when people used to go for only popular destinations. They are looking for new, smaller and niche destinations. Another thing is a lot of younger people are travelling, happy to go on backpacking, singles, young couples, a lot more impulsive, roughing it out on small budget-type of travel, is also something we are seeing. Earlier it used to be one big family holiday either during summer holidays or winters; it used to be a big treat for families. But today we find that (people are) travelling through the year; people are taking many more short breaks, looking at the destinations at a few hours’ distance. For each of the metro cities, there are about 20-25 destinations that have become very popular for short breaks.
What about the spending habits of Indian travellers?
Travel has moved from being a luxury item to almost a necessity because of the way people’s lives are. Taking a break is considered to be a necessity to recharge your batteries, so that you can be more productive when you go back to work. People are willing to spend on travel. On the international side, people are looking at reaching out to the destination across the globe. It is not only Europe, UK or other popular cities in the world. People are looking for offbeat locations even on the international front. They are seeking out newer destinations and newer experiences. They are travelling to actually experience different cultures and a different way of life. Places like Turkey, Greece, South Africa, Kenya and Tanzania have become really popular with Indians.
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