The travel technology industry is recovering rapidly from the impact of the pandemic, with more stock market listings, improving performance and fundraising showing signs of recovery. Tracxn projects that eight startups are poised to receive $73 million in investment in 2024, compared to $36.1 million in the first half of 2023.
Nasdaq-listed Make My Trip’s total bookings reached $2 billion in the fourth quarter of fiscal 2024, up from $1.67 billion in the same period a year ago. The company reported a profit of $216.7 million in fiscal 2024, compared with a loss of $11.2 million a year ago.
In fact, the sector is seeing a surge in startups, reaching nearly 1,500 at last count, with 11 of those founded in 2024, according to Tracxn data.
According to PrivateCircle Research, five leading travel tech companies saw an average decline of 43% in revenue in FY21 compared to FY20, but saw an average revenue growth of 80.8% in FY23. These companies include Ixigo, Easemytrip, Yatra, Goibibo and MakeMyTrip.
“The drop in revenue during the pandemic has forced travel startups to innovate, which is why travel tech remains resilient despite the rampant fundraising slowdown,” Prateek Toshniwal, co-founder, IVY Growth Associates, told Fe.
Experts say that several travel tech companies, including online travel agencies (OTAs) and hospitality startups, have seen a 25-30% increase in air travel and accommodation bookings around the new year. User numbers have also increased by 40%. “We have seen a big shift post-pandemic where consumers are more keen to buy experiences, which is driving the growth,” Toshniwal said.
According to a report by Global Information Inc., the Indian online travel market is expected to reach $17.24 billion in 2024 and is expected to grow at a compound annual growth rate of 10.5% from 2024 to 2029, reaching $28.4 billion by 2029.
Olabel Stays, parent company of hotel major Oyo, reported profit after tax (PAT) of $12 million for FY23-24. EaseMyTrip also reported an increase in its operating revenue to Rs 1.64 billion in Q3FY24 from Rs 1.67 billion in the previous quarter. CEO and co-founder Nishant Pitti told the Financial Fair that the startup is focused on expanding its offline presence. “This will help us reach a wider customer base and provide a more personalized customer experience,” he said. In Q4FY24, the company saw a surge in hotel bookings on its platform of nearly 39 percent, while other non-airline segments saw a 53 percent increase.
A number of startups have gone public in the past year. OTA ixigo listed on June 18, while global B2B travel distribution platform TBO Tek listed on May 15. Aloke Bajpai, CMD and group CEO of ixigo, said the company had crossed 480 million cumulative annual active users across the group in FY24. “Operating revenue also grew by 30.8 per cent,” Bajpai said.
He noted that an increase in first-time international travelers is also driving demand. “We are seeing more first-time flyers for both domestic and international travel. For international travel, visa-free destinations have become quite popular among Indians, especially first-time flyers,” he said. ixigo has seen a 50-80% increase in flight searches to popular visa-free destinations such as Thailand, Malaysia and Mauritius in June this year compared to February 2024.
EaseMyTrip saw a 10% increase in travelers taking their first international trip from January to May compared to the same period last year. “This trend is rapidly gaining momentum and we are optimistic about its trajectory. Everyone is starting to realize the potential of first-time flyers who could become loyal customers in the future,” Piti said. To capitalize on this opportunity, travel tech startups are increasingly leveraging artificial intelligence (AI), data analytics, machine learning (ML) and GenAI (generative AI) to offer great deals and customized packages. This has enabled companies to develop more sustainable models that require less capital investment, experts note.
First published: 29 July 2024 14:39 IST
