A 13-year-old online travel agent in India has managed to clock its highest-ever profitability in a pandemic year.
EaseMyTrip, India’s second-largest online travel portal, saw its gross booking revenue nearly halve during the year ending March 31. Despite this, the company’s profits grew 86%, it said in a June 15 press release.
“This was possible due to increased commission from airlines, increase in operational efficiencies and our model of working on lean cost of operations,” Prashant Pitti, co-founder and executive director of EaseMyTrip, said. The company drastically reduced spending on discounts, marketing and sales promotion, and employee expenses.
Founded in 2008 by Pitti and his two brothers, EaseMyTrip debuted on the stock market on March 8, joining the very short list of Indian internet-based ventures that have gone public. By June 10, the company’s share prices had surged by 127%.
The New Delhi-based company has managed this success at a time when its peers are struggling. On April 15, another Indian travel portal, Cleartrip, was acquired by Flipkart, in a deal that was widely considered a distress sale.
One reason why EaseMyTrip’s performance has been better than its rivals is that the company operates with zero convenience fees thanks to the steady commissions it earns.
One of the measures that EaseMyTrip implemented for cost-saving was to use technology for processes that were human resource-intensive.
“The company automated processes like seat booking, meal booking, cancellation, customer service among others,” Pitti told Quartz. “The company in fact took this period as an opportunity to streamline its processes and added more people in the technology team.”
EaseMyTrip expanded its tech team from 46 to 64 people.
The company also renegotiated the payment gateway charges with service providers, which helped bring down costs.
All these measures helped it record a net profit of Rs30.5 crore between January and March this year, up eight-fold from the same period in the year prior.
Between January and March, when Covid cases in India were low and people started traveling, EaseMyTrip witnessed a V-shaped recovery, making almost 89% of the gross booking revenue as compared to a year ago, the release noted.
Much of India was ravaged by a second wave in April. It slowed down air traffic and hotel occupancy levels dropped, too. As cases come down and travel and tourism restarts, travel apps will play a key role in boosting bookings.
EaseMyTrip expects its performance to grow from strength to strength. The company anticipates “a huge pent-up demand” for the sector as more Indians are vaccinated, said Pitti. “With new avenues for growth from hotels and holiday sector and leveraging our existing base of customers for cross-selling, we anticipate increased wallet share from our customers enhancing the revenues and profitability going forward,” he added.
“The company plans on doing technology advancements like the WhatsApp chatbot that shall ensure an easy interface for customers,” said Pitti. “Also, we aim to expand overseas via its subsidiaries and use a 360-degree marketing approach to attract customers and revenues.”