MakeMyTrip, India’s largest online travel agency, reported adjusted operating losses of $35.8 million for the fiscal fourth quarter.
The company attributed the loss to “our continued high spends on marketing and sales promotions to acquire new hotel customers.”
The full fiscal year adjusted operating losses were $83.7 million.
But chief financial officer Mohit Kabra noted that the losses came close on the heels of scoring an eye-popping $330 million in a share placement and purchase agreement.
“We’re therefore well capitalized with over $0.5 billion of cash arsenal on our balance sheet,” he said.
Kabra was not apologetic about the level of the company’s marketing spend, which was meant to benefit both MakeMyTrip and the ibibo Group, a rival that MakeMyTrip acquired in January.
“We want to focus on addressing all the travel needs of the Indian traveler whether traveling in India or abroad,” he said.
“We will therefore continue to invest behind high decibel marketing and sales promotion campaigns to attract as well as retain the growing online customer base in India. This would be supported by appropriate investments in technology.”
CEO Deep Kalra said the company was well positioned to gain market share in the Indian travel market, which, not counting rail and car hire, is expected to exceed $67 billion by 2021.
“We’ve initiated a foray into the alternative accommodations of home stay segment, as we believe this would be an important stay consideration in the future,” he said.
“Our reach can potential span across all customer segments including consumers who prefer luxury hotels, to travelers who prefer a budget or home stay
experience. It can also span across metros to the interiors of India with different buying preferences including buying over vernacular platforms” – portals that “speak the languages” of India’s various regions.
He said the combined group has more than 63 million monthly shopper visits, of which 75% come via its mobile apps and web.
Kalra outlined some of the integration progress the company has made since closing the merger.
It moved the MakeMyTrip and goibibo teams to the same location in Gurgaon as well as to iys technology hub in Bangalore, “so they can begin to collaborate and operate more efficiently” he said.
On the supply side of the business, “we’ve been able to identify and offer properties that were unique to each of the brands,” Kalra said.
The inventory of redBus, which is part of the ibibo Group, has been integrated into MakeMyTrip’s bus booking engine, which Kalra said has led to “a spurt in daily business bookings” on the MakeMyTrip brand.
In addition, “we recently integrated MakeMyTrip’s international hotel supply with goibibo so that customers now have access to much wider hotel choice and selection across all our brands,” Kalra said.
“With integration efforts well underway, we also plan on rolling out more innovations at an even faster pace than before to help make customers' research, shopping and on-trip experiences better. We're aiming to deliver greater personalization, enhanced customization and continuously evolving user interfaces.”