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Makemytrip gains hotel business, losses air ticketing, reports net loss

This can come as a warning sign for Makemytrip, India’s online travel leader since long which has gone down in its revenues from air ticketing business for the last financial year.

In the recent disclosure of financial results for its Fiscal 2013 Full Year, it has reported total revenue of $228.8 million,  an increase of 16.4% over revenue of $196.6 million last year and a net loss of $6.0 million as compared to a net profit of $9.3 million in year ended March 31, 2012.

“In fiscal year 2013 we succeeded by offering superior user experience and customer satisfaction, despite facing various operating challenges,” said Deep Kalra, Chairman and CEO. “As part of our long term strategy to grow the Hotels and packages business, we significantly improved our annual non-air net revenue mix to over 35%.”

Makemytrip is currently generating revenues from its two major streams of Air ticketing and Hotel & packages, and have received $60.9 million and $164.1 million revenue respectively from these in FY13.

Despite of the fact that in air ticketing business, gross bookings grew by 12%, aided by higher airfares, revenue from air ticketing business decreased by 20.1% for the last FY 12-13. The reason can be the increase in competition with players such as Yatra, GoIbibo getting aggressive to capture the market share.

On the other hand, revenue from hotel business has shown a corresponding increase of 40.6% for FY13, owing to the acquisition of Hotel Travel Group and ITC Group in the quarter ended December 31, 2012.

The report also displays Q4, 2013 results showing decline in air ticketing revenue by 32.6% and an increase of 60.8% in revenue from hotel business as compared to previous fiscal Q4.

Fascinated by the growth of hotel and packages business, Makemytrip said that they will remain cautious about the growth in their ticketing business and will follow projected guidelines for FY14.

Makemytrip previous acquisitions include Luxury Tours & Travel Pvt. Limited (LTT) for $3 million, a 19.9% stake in Le Travenues Technology Private Limited for $4.8 million and My Guest House Accommodations Private Limited for an undisclosed amount  in 2011. Also, recently Makemytrip mobile app has crossed 1 million mark, adding on to its success in FY13 and showcasing its strategic view of mobile-first approach.

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