Mobile is an area Yatra.com is tracking very closely for opportunities: Dhruv Shringi

Dhruv Shringi

Gurgaon-based online travel agency (OTA) Yatra Online P Ltd (Yatra) recently acquired online hotel distribution network Travelguru from Travelocity for an undisclosed sum. With relations spanning over 7,000 hotels Travelguru has a tremendous brand recall in the ‘hotel only’ space. While Yatra has always been synonymous with flights, acquisition of Travelguru will help the company strengthen its position in the OTA segment as hotel providers also apart from flight ticket booking said Dhruv Shringi, CEO, Yatra. In conversation, Shringi shares his plans in the mobile space, overall market sentiments, business and more. Edited excerpts...

Now that Travelguru deal is done, how do you plan to go about the integration process?

We want to keep it (Travelguru.com) fairly independent. There isn’t that much integration we are doing apart from Travelguru becoming the supplier of content to Yatra. I don’t foresee this to be a major integration challenge. The Travelguru business will continue to be run by its existing management viz. Rajesh Jindal and Deepak Mavinkurve who will be leading a team of 150 people.

Which other areas will Yatra now look at for acquisitions?

From an opportunity point of view, there is a lot of stuff happening or beginning to happen on the mobile front. That’s an area we are tracking very closely for interesting opportunities. The advent of smart phones is expected to significantly facilitate mobile travel booking and travel research and trend increasing significantly with newer and affordable handsets getting launched at regular intervals.

Though companies like Via, Cleartrip etc. have tried doing a few things on the mobile platform no one has really been able to do something really cool and differentiated. So we are still on the lookout in that area. While we are working on it organically, we will certainly explore any interesting / exciting opportunity on the mobile front.

Is there a specific sum you have set aside for inorganic growth?

We haven’t really set aside any specific corpus for inorganic expansion. We are actively exploring opportunities and if anything exciting does come up we will evaluate it on a case to case basis.

How was business last year? Do you see the momentum sustainable?

Our overall business in FY’12 grew at slightly over 60% year-on-year (YOY). We are expecting the growth rate to temper a bit considering what is happening in the macro environment at the moment. But we still think that growth would be in the region of mid-to-late 40% based on our internal projections for the current fiscal. While international flight bookings as a segment is growing, holidays and domestic hotels are obvious drivers of the business going forward. We see these segments registering growth in the region of 80-100% over the course of this fiscal.

So you are sensing a slowdown in the travel space?

For the first time in almost seven years, domestic air-traffic was negative last month. This clearly indicates that the overall market sentiment at the moment definitely is negative. Despite the fact that everyone knows what needs to be done from an economic standpoint, it is one of those scenarios where the political will just doesn’t seem to be there. We are looking at a fiscal deficit situation which people very well know how it can be reduced, but the big challenge is whether they have the political will and desire to take necessary measures. Given that things are reaching at such a dire strait now, action is required and I’m hopeful the government will initiate it.

How long do you think will the slowdown last?

I am hoping that by Diwali things should start picking up. If you look at India vis-a-vis rest of the world, things here are not so bad. We are still growing at 5.5% whereas there is absolutely no growth in the rest of the world and some countries are even witnessing negative growth. So we are still in a better position. I feel, if the government can initiate some action right now (even though a lot of it is still sentimental) we should be able to get back on the path to recovery by the end of this calendar year.

While there are large macro factors, like stuff happening in the European Union (EU) which has a big overhang. It has a major impact on the Indian currency and the fiscal deficit. However, with Prime Minister Manmohan Singh expected to keep the finance ministry I am hoping some reforms to happen soon. There are no fundamental issues which is why I think the opportunity is there.

You are going aggressive on opening franchise outlets in the country with 100-odd stores in this fiscal. Is the number achievable?

The franchising opportunity being offered by us has gained a lot of traction in the market. What is happening is that rental yields are heading southwards thus owners of commercial real estate space are not very keen on giving it out on rent. Besides, people owning a property and having interest in becoming a franchisee are more keen on starting a business. So from a return point of view, this is becoming a very attractive business and that’s the kind of alternatives people are currently looking out in the market.

We are targeting 100 franchise outlets in the current fiscal and I think the number is fairly achievable. While we started that off as a very stretched target, looking at the kind of response in the first quarter of the year, we should be able to get all of them up and running in this fiscal.

What are your views on car rentals and bus ticket bookings being added by various online travel portals?

I see bus ticket bookings as largely a value-add service because the marginal earning per transaction is fairly low. Car rental services however, is a bit more attractive from an overall earnings point of view. It might not turn out be very materialistic in this fiscal (as the focus is on building the hotels proposition), but over the course of next couple of years car rental services will begin to play a meaningful part in the overall business.

Any new fund raising plans?

No. We don’t have any fund raising plans at the moment.

You recently appointed Bollywood actor Salman Khan as brand ambassador for Yatra.com. Does he also have a stake in the company?

Salman is a shareholder in the company with a minority stake. While there is market rumour about him (Salman Khan) owning 5% in the company, I really can’t comment on market speculations.