Planes, Trains, and Algorithms: Who Wins India’s Travel Game?
Our views on the listed travel players where we find one winner and one pretender
India’s travel industry is projected to expand at a CAGR of 9% between FY23 and FY28, supported by improved connectivity across different travel modes, rising travel use cases (including revenge travel, workations, religious trips, and exotic vacations), and greater affordability and frequency of travel, driven by a growing middle class and rising income levels.
The Indian travel and tourism sector is undergoing a rapid digital transformation. As the country experiences increased penetration of smartphones, internet, and UPI-based payments, travel planning and bookings are swiftly shifting online. With this, online travel is expected to outpace the broader market with an estimated 13% CAGR, particularly fuelled by increasing internet access in smaller towns and cities. Notably, the Online Travel Agency (OTA) segment could grow even faster, up to 18%, thanks to platforms enhancing service quality and offering more value-added features.
The beauty of India’s listed travel ecosystem is its segmentation where we have:
B2C focussed OTAs: MakeMyTrip, EaseMyTrip, IXIGO
Rail focussed OTAs: IRCTC
Tier 2 and Tier 3 City focussed OTAs: IXIGO
Corporate focussed OTAs: Yatra
Offline to online tech enablers: TBO
Each player brings a unique flavour, some dominate consumer mindshare while others build sticky, recurring B2B relationships.
In this post, we detail each of these players, their valuations, our views on their business model and recommend the one that best fits our criteria for asymmetric risk-reward: valuations discounting all the negatives since its IPO and not take into account the positives that have taken place in the past 2 years. We also highlight one player where we believe the numbers doesn’t reflect the reality and should be avoid at all cost. manipulated and not reliable.
This post is only for our clients, if you wish to receive this note, please email at gaurav.a@nineonecapital.in
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