EaseMyTrip focuses on acquisitions in FY23; looks to grow international business

Online travel aggregator EaseMyTrip is focusing on inorganic acquisitions in FY23 after acquiring Spree Hospitality and YoloBus recently.

The company also updated about its two acquisitions that it did in the last seven-eight months.

"Spree Hospitality increased its number of hotels to 27 currently from 12 at the time we acquired it. It is able to generate business of Rs 20-30 lakh monthly. YoloBus is in incubation stage. We had acquired the company at Rs 2 crore. Business is coming back as its website and technology has started 2-3 months ago," the company said.

"We have created six subsidiaries and now the focus is to make them operational. We recently made our Dubai, London and Thailand business operational. Dubai office, which started six months ago, did business of Rs 7 crore in Q1 FY23 and in Q2 it did business of Rs 24 crore," said Pitti.

He said the company is not charging convenience fees from customers in Dubai versus other players that are charging Rs 1,000-2,000 convenience fees per passenger which is resulting in strong traction for EaseMyTrip.

The co-founder also said that currently the focus is to grow in the existing international geographies and not add more markets.

EaseMyTrip in Q2 recorded gross booking revenue (GBR) of Rs 1,978 crore and recorded profit after tax (PAT) of Rs 28.2 crore, up 4 percent year-on-year (YoY). "Our total business grew by 20 percent despite Q2 being a lean period versus Q1 and Q3," Pitti said.

The company's expenses increased in Q2 due to sponsorship deals like official co-sponsor partnership for Asia Cup 2022 and Presenting Partners for the Road Safety World Series T20 Tournament 2022 for which it incurred a cost of Rs 13 crore.

"First time, the company took a branding initiative with Asia cup and Road safety which was a huge marketing expense due to which the profit did not go up that much. But this was one-time expense and because of these efforts we have been able to gain market share. These kind of branding exercise are not done every quarter and this will pay us off for couple of years. We will go back to our marketing expense as they were before in the next quarter," he said.

Marketing expense is expected to go back to 0.6-0.9 percent of gross booking revenue in the coming quarter from 1.5 percent in Q2.

On travel demand, Pitti said that one area of growth is international holidays. "There were teething issues in restarting visas because of which lot of visas went in for long delays and travel plans were not fulfilled. So, from this quarter onwards international travel numbers should come back and this will be one reason for growth in Q3 and Q4."

He added that the Indian travel market has strong potential to grow. "India has its own advantages as there are going to be 66 new airports coming in the next decade. From 85 million domestic flyers in FY22, the number is going to shoot up to 330 million in FY32. The industry is going to grow 3.5 times in the next decade," he said.