After blocking OYO Rooms and Zo Rooms from its listing and marketing hotel properties on its website, MakeMyTrip has introduced its own brand of budget rooms called Value+.
Value+ will offer rooms from Rs 900 to Rs 2,000 per night, competing directly with OYO Rooms and Zo Rooms who are playing in the same segment.
Hotels listed on Value+ will offer basic services such as air conditioning, satellite TV, free breakfast and WiFi. Hotel rooms carry margins of 15-25% as against flight tickets that earn about 5%. MakeMyTrip has already aggregated about 1,000 hotels under the Value+ brand and plans to double the number in the next 30 days.
The purpose of launching budget rooms is to fuel MakeMyTrip its revenue generation. Currently, the company generates 45% from its hotels business, its wants to push the number to 75% in the next three years.
According to Deep Kalra, MakeMyTrip Cofounder and Group CEO, the idea to launch Value+ came up after customers on its website complained about the quality of services provided by hotels listed under aggregator startups. He said, “For us, the guiding light is our customer. If the customer feedback is negative, there is little we could do (than delist).”
The Indian hospitality industry has emerged as one of the key industries driving growth of the services sector in India. The fortunes of the hospitality industry have always been linked to the prospects of the tourism industry. But the new twist in this segment has come with the introduction of budget hotels which could be booked on the go.The online hotel industry is expected to grow to $1.8 billion by 2016 from the current $0.8 billion. It will be interesting to see what innovations players in this avenue would bring next.