Mumbai: Online travel agencies have found it hard to attract hotel customers for years. Now, MakeMyTrip Ltd claims that it has succeeded in doing so.

The NASDAQ-listed firm used to earn 80% of its revenue from its flights or air business and the remaining from hotels and packages business in 2010-11.

In 2015-16, MakeMyTrip earned 50% revenue from hotels and packages and the remaining from air ticket sales, the firm’s co-founder and chief executive officer (India) Rajesh Magow said in an interview last week.

“The goal is to take this to 70% from hotels and packages in the next two to three years. Essentially, we have been saying that the company needs to reduce its dependency on the air side and increase exposure to the non-air side of business, which is hotels and packages," Magow said.

“Hotels and packages offer relatively higher margins in double digits while pure air ticketing offers single digit margins. Also, on the air ticketing side, you have only a handful of players, while on the hotels and travel packages side, you have more firms that help diversify the business," Magow added.

He said MakeMyTrip is doing everything to get its hotels and packages side right.

“Within hotels and packages, MakeMyTrip was more in favour of packages during the initial years. Now, are designing products more in favour of hotels," he said.

Founded by Deep Kalra, MakeMyTrip, India’s largest online travel agency, has survived a financial slowdown and the 2003 SARS (severe acute respiratory syndrome) scare that grounded many travel and dotcom companies. The company is now building on more online offerings.

The number of Internet users in India grew rapidly—by 40%—in 2015 to 277 million, according to Mary Meeker’s 2016 Internet Trends report, released 2 June.

India will have 810 million smartphone subscriptions by 2021, a four-fold growth from now, according to The Ericsson Mobility Report, India edition, released on 7 June.

So, what was the biggest problem in getting hotel customers online? “Broadband capability," Magow said.

Earlier, online travel agencies were not able to have more content, including pictures of hotels and destinations, owing to Internet connectivity issues.

“But now scene has changed. With increased connectivity and penetration of smartphones, we were able to deliver better content for users to convert them into online," he said.

As a result, MakeMyTrip in 2015-16 had bookings from 677 cities compared to 400 cities in 2014-15.

So how did MakeMyTrip bring hotel customers to the online platform?

According to Ajay Awtaney, a financial services professional and travel writer based in Mumbai, buying behaviour has changed with people looking for a deal on everything online.

“And since travel is the biggest e-commerce category, people do buy hotel inventory online now. Sometimes, it is a cheaper place as compared to walk-in rates. Sometimes, it gives you a choice you never thought of yourself. Sometimes, you need a room last minute and it is easier to buy on your phone app than call hotels. And sometimes, hotels deep-discount last-minute inventory so you may have a deal," Awtaney said.

MakeMyTrip’s Magow said the firm started investing in mobile app development early. Its first app launch was on the Blackberry OS when it was still popular in India, followed by Android and iOS. It had numerous user- interface changes for smooth booking flow and, post sales, leveraging the native capabilities of mobile handsets.

This encouraged customers to book hotels online by presenting all types of hotel content such as details of hotel amenities, location-based search, high-quality hotel pictures and hotel reviews, among others.

On the supply side, MakeMyTrip increased the number of domestic hotels to 30,000 and international hotels to 300,000, including all-star categories and price points.

On the customer acquisition side, MakeMyTrip conducted “Appfest" promotions, “makemytrip wallet", “mytrip rewards" loyalty programme, and a high- decibel advertising campaign to promote online booking of hotels on mobile with leading Bollywood actors Ranveer Singh and Alia Bhatt as brand ambassadors.

“We must have invested at least $25 million in a couple of quarters in translating the offline hotel customers to online," said Magow.

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