‘Multiple Indias’: Yatra and MakeMyTrip CEOs Push Travel Industry To Embrace India’s Diversity

CEOs at MakeMyTrip and Yatra Online agree: India holds more than just a country. 

“There are multiple different Indias. There isn’t any one India,” said Dhruv Shringi, CEO and co-founder of Yatra Online. “So you have to figure out which India you’re addressing.”

At the Skift India Summit 2024, Shringi and Rajesh Magow, group CEO and co-founder of MakeMyTrip, emphasized how travel businesses should account for India’s diversity of travelers and destinations. The pair dove into the importance of millennials, online penetration, sustainable business strategies, and tailored market approaches — all while considering the country’s growing middle class.

Here are some highlights from their conversation with Skift Founding/Executive Editor Dennis Schaal, shortened for clarity.

While there is plenty of potential in the domestic market, outbound travel opportunities are becoming boundless for Indian travelers, too.

Shringi: I think there is a huge market out here on the domestic front. The number of experiences which can be curated in the domestic market are also immense. The customer finds it inherently comfortable traveling domestically, also. Having said that, I think there is still a large part of aspirational India which views international travel as a really big thing.

Magow: (For) all sorts of demographic cohorts, if you see, the income is rising across the board, whether it is less than $5,000 income, which is going to drive the, let’s say, ground transport traffic, or it is more than $10,000 income, growing from, say, about 50 million households to about 100 million households in the coming years. There’s going to be opportunity both for domestic as well as outbound international (travel).

OTAs should consider India’s diversity and understand their customer segments.

Shringi: I think if you look at India, one thing we’ve learned the hard way is that there are multiple different Indias. There isn’t any one India. So you have to figure out which India you’re addressing.

For a moment, if you just focus on the middle class, the 25 to 30 million — because the guys who are in the top 1%, they are anyways traveling overseas — the aspirational class in India is growing pretty rapidly, and it’s no longer limited only to the metro cities. What we’ve seen is that travel is becoming, especially post-pandemic, such a top-of-mind thing for people to do, right? Everyone wants to live an experience of life.

There is a saying that’s coming in right now. It’s based on a movie in India called Zindagi Na Milegi Dobara, meaning, “You only live once.” On the basis of that, you’re seeing people wanting to spend an incremental part of their disposable income toward travel. So, from our perspective, we are looking at going deeper into tier-two, tier-three markets (to) see how’d you access these customers.

How do you get into these tier-two market segments where people have historically maybe traveled domestically, but always had the aspiration of traveling internationally, and provide them a platform that enables them to do this seamlessly?

Infrastructure development is a key driver of travel in India.

Magow: Look at some of the CapEx (capital expenditure) investment that has happened across the board, improving the infrastructure, whether it is all kind(s) of transport mode(s) or new airports getting added, new capacity getting added. There is investment happening in the road infrastructure. There is investment happening in the rail infrastructure… I think this momentum, the continued momentum, is going to further help to support the domestic travel industry, for sure.

I think the challenge is going to be to take the traffic away from the main cities… or the key destinations because they’re busting, like Goa. Unless Goa would expand the capacity, it’s going to be a challenge because Goa is the only beach destination that we have in India. And similarly, many hill destinations and stuff like that. So the in-destination infrastructure needs a lot of improvement.

MakeMyTrip and Yatra Online see success with tailoring campaigns to destinations.

Shringi: I think India is such a diverse market, and each region, each destination, tends to have its own nuances. At least in our experience and now, having seen how digital platforms have evolved (in ways) that allow you to segment your messaging much better, we’ve found that being more specific to what the region is about, to… the particular activity you’re trying to do, tends to give you a better result than having a more generic (consumer strategy).

A generic one is needed at times to build out the brand, build out saliency, but, once you’ve achieved a certain level of saliency… at least we’ve seen being more specific in your messaging, especially when it comes to marketing certain regions, that tends to be more efficient.

Magow: (The) more and more you go region specific, you would realize in India every state is a different country in itself. The tastes are different, the preferences are different, and so on. So I think it’s actually good, in a way, because it probably lends some sort of advantage to the local players who would sort of understand the market really, really well. It brings some sort of a mode to the businesses, as well. So I think that’s the way to go.

India’s travel market needs to prioritize online penetration.

Magow: We are in a country where the market is growing, and growing phenomenally. The overall market is growing, but, if you come to the digital market, (the) digital market is growing even at a faster rate. Look at the internet penetration today… 50% internet penetration, but the e-commerce penetration is only about 20%. So just between the internet penetration and e-commerce penetration, there’s a huge amount of headroom.

About 90 million households that are getting added in the next five years are going to be headed by millennials. Now, millennials, who were born in liberalized India and (their) predominant buying behavior is online… you can see from an online penetration standpoint, digitization standpoint, if you look at the country as a whole, there’s a huge amount of push we didn’t talk about.

(Speaking on MakeMyTrip’s “book now, pay later” feature with hotels), there still is a huge opportunity because the online penetration for the hotel segment, relative to the flight segment, is much, much lower today, whether it is domestic or international hotels.

Shringi: To me, enterprise (travel) is where consumer travel was maybe about 10, 12 years ago, from an online penetration point of view. It’s just about getting onto the S-curve for online penetration. So the focus is in terms of growing and going deeper into the market, rather than getting into a head-on battle, which then makes it a zero-sum game.

Some OTAs jump into customer acquisition without considering longevity.

Magow: Think about any emerging industry, or an emerging country rather, and you will see exactly the same pattern. You will see, (in the) early stage, there will be some interest that’s building up, and then it catches up, and then (a) huge amount of capital inflow that comes in. And then, all of us, I would say, including us, we all get carried away, tapping into that market opportunity very, very aggressively.

We all sort of get carried away with the reach that internet provides, and (we think), “Can I just jump the gun and acquire the customers faster than anyone else in the market?”

I think what is more important is to realize very quickly — and that is where then the men would get separated from boys, I would say — that it’s not sustainable. Which are the core areas that you need to sort of focus on for you to be able to build a long-term, sustainable business?

Shringi: My take is that ultimately acquiring customers in the short run doesn’t really solve for anything if you can’t retain that customer. If you don’t have a strategy for a long-term retention of that customer in a manner that makes sense — and, as… public (companies), I think that’s something that both of us constantly have to really think about — that is what I lose sleep about.