exclusively when booking directly with the hotel. fully visible to the public and opaque i.e. sell add-on services such as airport pick-ups and late check-outs. The penetration levels of hotel market branded names is around 15%. You won’t see any dramatic measures out there. A well-designed and visually appealing booking engine. “The strategy going forward for the next quarter is that the business will be run as is. “Today’s announcement is a significant step forward for the rapidly growing travel industry in India. What will be the ripple effects of this merger on the travel and hotel and accommodation industry? We want to keep getting better in terms of marketing efficiency. Co-founder Rajesh Magow will continue to remain CEO India of MakeMyTrip. Inherently, these brands stand for different things in the customers mind. Air ticketing transactions were 2.7 million, a growth of 90% year on year. There is such a huge growth opportunity in all of the verticals except air ticketing. The combined entity will bring together top brands in the consumer travel space in India including … ThinkStock Photos. The important thing is that the hotels need to be prepared with both the right tools to aid direct conversions and the revenue strategy. Flipkart, it’s other major investment, has always been a investment, run by its founders. The Ibibo Group has reportedly contributed around $82.8 million in cash to MakeMyTrip. Ashish Kashyap, Founder and CEO of Ibibo will join MakeMyTrip’s executive team as a Co-Founder and President of MakeMyTrip. The deals which will be the biggest venture in TravelTech industry have received the approval of The Commission Companion. If the industry news is to be believed, there are more such mergers and consolidations in the pipeline in the online travel and hotel space. In a deal that may be valued at $1.8-2 billion, Makemytrip will acquire rival ibibo in what has been pegged as the biggest acquisition in India's online travel space. It’s cash plus net working capital. 8,997 Views, Last updated on March 17th, 2020 at 07:58 am. Business Travel and Future of Work Summit, Naspers was supposed to invest/had invested, Skift Live Sessions: Marriott Group President Stephanie Linnartz, Skift Live Sessions: Regulating the Short-Term Rental Economy, Skift Live Sessions: How Diversity Fuels Creativity. It has effectively dissolved the Goibibo and merged it into MakeMyTrip in exchange for a majority 40% stake. I don’t expect any significant changes in terms of the operating cost. Goibibo is owned by NASPER groups. The smaller players didn’t do very well too. Hotels can never match that kind of discounted pricing. The newly-merged entity has emerged as the biggest online travel giant of the country and will enjoy an approximately 60% market share in the online flight booking segment and 70% in the online hotel space. Ibibo data, from Naspers FY16 earnings announcement: Remember that Ashish Kashyap had set up Ibibo for Naspers in 2007, and the business went through many segments and business models (social networking, messaging, music streaming, games, payments, grocery and ecommerce marketplaces), before the airline ticketing business in Goibibo finally got traction. The ibibo Group, which is owned by global technology group Naspers Ltd, has agreed to pursue a transaction that will combine the two businesses under MakeMyTrip. It also comes eight months after Naspers invested USD 250 million in Gurgaon-based Ibibo Group. We would like to build upon what we have. 46% of online flight orders are mobile. In the travel space, the... Read full article » But, when an OTA lists the same room of the same hotel on its site, it offers it at a 20-30% discount or doles out hard-to-resist offers like pay 50% with your loyalty points. We have RightStay and Ryde, and both these spaces are very exciting. But when you look at b2c, you have to tread very carefully (millions of customers). The coming together of two of the largest online travel companies - MakeMyTrip and ibibo Group - is going to shake up the online travel market, and will create a … 4 million total India transactions on mobile, 3.2 million total air transactions on mobile. 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In the travel space, the combined entity includes: MakeMyTrip, goibibo, redBus, Ryde and Rightstay, which together processed 34.1 mm transactions during FY2016. The Make-MyTrip-Ibibo merger was supposed to lead to a healthier balance sheet but that is yet to be reflected. If we see an extranet which is seeing better usage by suppliers, it is easier to use, we might change things, because it’s just around 40,000 suppliers. 1000 on its website. This subsequently brings down the net cost to the guests. In case of air, we should be in the 20% mark.”, “We’ve had around 16% of the domestic flight market for MakeMyTrip. Group owns the B2C online travel aggregator Goibibo, and online bus ticketing platform RedBus.in. Now, if the OTAs decide to reduce discounted pricing or even a slight reduction in those discounts by the OTAs, presents the opportunity for hotels to get guests to book direct with them by offering to match but more realizable discounts or attractive additional amenities (spa vouchers, dinner on the house, complimentary bar coupons, etc.) Harsimran Julka Moneycontrol 1. They can break free from the hefty commission model (30%) that they need to pay to the OTA for filling up their rooms. Leave a comment New Delhi: Online travel firm MakeMyTrip will acquire rival ibibo in an equity deal that will create one of the leading travel groups in India.South Africa's Naspers and China's Tencent Holdings are selling ibibo Group to MakeMyTrip in exchange for an issuance of new shares by MakeMyTrip, the company said in a statement. This story originally appeared on Medianama as “MakeMyTrip and Goibibo Merge.” It appears here with permission. Fifteen months after MakeMyTrip announced its merger with smaller rival Ibibo Group, the … China’s Ctrip, the world’s second largest online travel company, is doubling down on India after it announced a deal to increase its ownership of travel company MakeMyTrip … MakeMyTrip brings its strong brand, robust mix of domestic and outbound hotels and packages business and strong position in the air ticketing business. Additional fund-raising? Is it too unreasonable to think that Naspers might consider merging Olx with Quikr, in exchange for equity? Hotel transactions were 3.6 million, a growth of 420% year on year for FY16. On 31 January 2017, MakeMyTrip made a strategic combination with the ibibo Group by way of an … Bus transactions are very large, and hotels and alternative accommodations through RightStay would be a nice fit. While the MakeMyTrip and GoIbibo merger has created a loud noise in the sector, the ripple effects will emerge clearly only after a few months. As a result, other OTAs too were offering ridiculous discounts by cannibalizing their own profits to attract customers. Here are ten things to know about the all-stock deal between two of India’s largest travel booking portals: 1. What we don’t know: What happens to the $250 million that Naspers was supposed to invest/had invested in GoIbibo this year? They’ll have to file for approval with the CCI within 30 days. In a landmark transaction to form the largest online travel company in India, MakeMyTrip (MMT) has agreed to acquire Ibibo Group’s online travel business in the country. It takes a long time, and some go on for multiple years, and I don’t think we want take on any heroic assumptions there. The merger creates one of the leading travel groups in India bringing together a collection of leading consumer travel brands, including MakeMyTrip, goibibo, redBus, Ryde and Rightstay, which together processed 34.1 million transactions during fiscal year 2016. At the end of the day, these portals end up with severe cash burn and a major dent in their profitability. In the last quarter, we do feel we have enough and more on the balance sheet to be looking at a fund raise at any time in the next one year. Photo Credit: Deep Kalra will remain Group CEO and Executive Chairman of MakeMyTrip following its merger with GoIbibo. ibibo Group, via its brand goibibo and redBus, comes with a strong presence in various fast growing travel segments, including hotels, bus bookings and air ticketing. According to a report, the combined company is expected to have a gross booking of $3-3.5 billion (Rs 19,958 crore-Rs 23,285 crore). They can try to source direct business through their own booking engine at a sourcing expense of less than 10%. However, if the Hotel sector gets its act right now, it can not only stay insulated from the big waves but can also emerge as the winner. The merger will bring together a bouquet of leading consumer travel brands, including MakeMyTrip, goibibo, redBus, Ryde and Rightstay, which together processed 34.1 million transactions during February, 2016. However, the Nasper-backed MakeMyTrip and Goibibo merger took everyone by surprise. Contours of the merged entity: According to Medianama, the combined entity (with MakeMyTrip, goibibo, redBus, Ryde and Rightstay under its umbrella) would have made 34.1 million total transactions in 2015-16, 9.7 million air transactions, 6.6 million hotel transactions and 17.5 million bus transactions. Hotel Technology I don’t see a shift from that strategy.”, Rationalisation of Marketing spends: “It’s only fair to imagine a rationalization in the competitive scenario, since both these brands were leading in the hotels space. GoIbibo & MakeMyTrip merger: Why I am not happy as a consumer While consolidation is good for investors and entrepreneurs, it reduces competition. And with the company's merger with ibibo Group, he … Similarly Ryde for customers from tier 2 and 3 towns to come to airports in major cities. The heavy discounting was the main thing preventing consumers to book directly with hotels. Almost 50% of domestic air travel is done online, though the international ticketing there is still opportunity. Their product releases like Ask, Gocash. In a major acquisition in the travel commerce space MakeMyTrip acquired competitor ibibo Group for an estimated $1.8 billion (about Rs 12,011.1 crore) deal. New Delhi, New York January 31, 2017 - MakeMyTrip Limited (NASDAQ:MMYT), India's leading online travel company, today announced that it has completed its merger of the ibibo Group. We can only speculate: The last 12 months saw heavy discounting in the hotel segment between Make My Trip and Go Ibibo. MakeMyTrip CEO Deep Kalra “This brings good news for direct bookings of hotels”. In turn for these three assets and cash, Naspers who owned a majority stake in goibibo, will get 40% ownership in MMYT – MakeMyTrip’s listed overall holding company. The merger will strengthen MakeMyTrip’s position in the OTA business and pump up competition against portals like Yatra.com, Cleartrip, Booking.com and Expedia. Together, Ibibo and MakeMyTrip processed 34.1 million transactions in 2015-16. MakeMyTrip brings its strong brand, robust mix of domestic and outbound hotels and packages business and strong position in the air ticketing business. MakeMyTrip & Goibibo Merger: How does it affect the hotel industry in India? October 20, 2016. MakeMyTrip is already the largest OTA in the country and the merger will strengthen its position while toning down the cut throat competition in the business. The merger has taken place after three months of the initial announcement. These discounts come out of the pockets of these agencies themselves. We haven’t gone down to looking at DGCA data overall and trying to calculate combined share.” (Editor: this last bit is hard to believe), Founder Deep Kalra will remain Group CEO and Executive Chairman of MakeMyTrip. ”, Next Quarter? However, the Nasper-backed MakeMyTrip and Goibibo merger took everyone by surprise. Javascript is required for this site to display correctly. Though the announcement of the deal was made in October 2016, the merging took place when ibibo contributed about $82.6 Million in cash for MakeMyTrip. They might go as far as a 10-15% discount, but they can’t reduce it any lower than this. A hotel puts up a room for Rs. Ibibo Group is an online travel organisation founded in January 2007 by Ashish Kashyap. With reduced competitive intensity, the desperate discount battle for market share is expected to reduce and these portals will be able to reduce their cash burn. MakeMyTrip founder Deep Kalra, who pioneered online travel in India, has constantly adapted to market conditions. The combined entity will bring together a consumer travel brands, including MakeMyTrip, Goibibo, redBus, Ryde, GoStays, Value+ and Rightstay, together under one group. If you look at service apartments, villas, BNB’s, that is an infinite market. Even rumors of consolidation between e-commerce rivals like Flipkart-Snapdeal and Flipkart-Paytm have been doing rounds for a long time. promo codes that are not visible on the website so you can create special promo codes that can be offered to loyal customers, etc. The merger creates one of the leading travel groups in India, provides a one stop shop for all Indian travelers and brings together a collection of leading consumer travel brands, … ibibo Group, via its brand goibibo and redBus, comes with a strong presence in various fast growing travel segments including hotels, bus bookings and air ticketing.

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