Following setback in Q2, Yatra sees growth in July, August

India-based online travel agency and corporate travel provider Yatra saw a severe impact on its financial results from the second wave of COVID-19 that swept through the country in the second quarter.

Adjusted revenue dropped nearly 50% compared to Q1, to $6.6 million. 

Total gross bookings (a combination of air ticketing and hotels and packages) dropped even more sharply in the quarter, down more than 71% from more than $100 million in the first quarter to just $28.5 million. 

Despite the challenges, Yatra co-founder and CEO Dhruv Shringi says stringent cost control measures enabled the company to achieve positive adjusted EBITDA in Q2 of $522 thousand – though much below Q1 adjusted EBITDA of $1.2 million.

And now the company is seeing signs of improvement in Q3.

“Over 500 million people in India have now received at least one dose of the COVID-19 vaccine and India is currently administering approximately five million doses a day. We are beginning to see demand also re-emerge strongly on account of the low case counts and vaccination drive in India,” Shringi says.

“In the month of July 2021, industry air passenger numbers grew 61% as compared to June 2021, and we are beginning to see signs of recovery in corporate travel as well, as more and more employees get fully vaccinated. During the month of July 2021, gross booking for corporates grew 268% as compared to June 2021 and August 2021 is currently trending at 316% growth as compared to June 2021.”

In Q2, Yatra’s adjusted revenue from air ticketing was $4.2 million, down 51.5% from Q1, and adjusted revenue from hotels and packages was $600,000, down 75.4% from Q1.

The company says gross bookings for corporate travel in July were more than double that of June and August is trending to be its highest revenue month for corporate travel since the pandemic began.

Yatra launched a freight forwarding business in August 2020 and, in a letter to shareholders, Shringhi says he expects it to deliver more than $5 million in revenue in 2022 and has the “potential to be even bigger than corporate travel.” 

The company also created a chatbot product – currently via WhatsApp and launching soon in Messenger - that helps customers address post-booking issues. And Shringhi says Yatra is expanding its payment methods, including adding a “book now, pay later” option.

At the end of July, one of Yatra’s shareholders, Maguire Investments, issued a public statement expressing concerns about the ability of the board and management team “to realize the Company’s true potential, allocate capital appropriately and capitalize on its growth prospects.” Maguire’s letter proposed a solution, dubbed the “Yatra 2022 Plan,” with suggestions including aggressively pursuing growth opportunities, restructuring the company’s corporate governance and reconstituting its board. 

In his letter to shareholders regarding the financial results, Shringhi says he does not want to rebut the issues one by one, and instead reiterated that he believes Yatra’s board and management team are highly qualified to lead the company through its next phase of growth and that the board is reviewing its corporate governance practices to determine if changes should be made.