OTAs MakeMyTrip & GoIbibo to merge

Two of the big guns of Indian Online travel agencies, NASDAQ-listed MakeMyTrip and GoIbibo, are going to merge under the MakeMyTrip brand over the coming days, bringing together a whole bunch of travel brands, including MakeMyTrip, GoIbibo and Redbus. This is perhaps the largest transaction in the Indian Travel space, with the combined entity valued at USD 1.8 Billion in total.

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Following the transaction, which is expected to complete by the end of 2016, Deep Kalra will be the Group CEO of the combined entity, and Ashish Kashyap, who was the CEO of Ibibo, will join the team as a co-founder. GoIbibo was owned by Naspers, a South African technology company, and they will now be the single largest shareholder in the combined entity.

Impact

The consolidation of the two companies will perhaps lead to a better outcome for the companies, but not for the customers. While airfares were already at a multi-year low, the OTAs used to even discount these even further and make them cheaper. Perhaps this will stop, or slow down now, given the sector now has one less major player. The other major Indian OTAs now will be ClearTrip and Yatra, which is in the process of getting listed on NASDAQ as well.

MakeMyTrip was traditionally strong in the packages business, along with its presence in domestic and international hotels. On the other hand, GoIbibo had also built a nice franchise in Air ticketing, but also bus ticketing (via RedBus), and hotels.

This also means the consolidation in their position on hotels. Both of them were spending aggressively on hotel discounting, and now this should slow down and also should give them a better position to deal with the sellers of this inventory.

The transaction is still a few months away from closure, since it will need regulatory approval as well.

Bottomline

For you as a customer, discounts and promotions will definitely reduce. So brace to pay a little more money for your flights and a lot more for your hotel rooms. I’m waiting to see what more information is going to be made public at this point of time, and will update this post accordingly.

What do you think of this move? Are you ready for MakeMyTrip v2 and how do you think it will impact you?

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Comments

  1. I’ve used MMT extensively – they came up with really good offers on their app for especially for hotels in Thailand. I think steep crazy discounts on hotel bookings will go away since MMT and IBIBO were in direct competition in hotel booking space.

    For flights both IBIBO and MMT have been hit and miss. We will continue to see marginal discounts even after the merger of these two.

  2. Agree with Abhisek and Seetha Raman. Even I’ve saved bucket loads of money in international hotel bookings over the last 1.5 years by using promo codes and gocash. Never been a big fan of MMT, though they’ve really been stepping up their game by revamping their website, tying up with AmEx for a credit card, rolling out a pretty decent app and bringing more offers through banks. Though i think the offers through banks will continue to show up, perhaps the days of steep discounts on hotel bookings might be drawing to a close. Yatra was never too big on those, so eyes will be on ClearTrip and smaller sites like Musafir.
    Research analysts have given a big thumbs up to the deal. So clearly works for the companies i think.

  3. GoCash has been my single biggest saviour since last couple of years, especially for hotels, and always handy when there is no other promotions going. Hopefully the merged entity retains this feature which made goibibo what it is today!!

    • Very true. completely agree with your point. Paying through Gocash for hotels meant an additional 20% less being paid out of the pocket after applying their discount coupon codes. My past three years of hotel bookings were all in Goibibo only for this advantage. Hope this statys!

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