The Indian e-commerce sector is witnessing a wave of consolidation. The Naspers-backed MakeMyTrip and Goibibo merger took everyone by surprise. MakeMyTrip acquired rival Goibibo, and the merged entity is valued at $1.8 billion, making it the biggest merger in India's online travel space.
What Are the Ripple Effects of This Merger?
The newly merged entity has emerged as the biggest online travel giant in the country, enjoying approximately 60% market share in online flight bookings and 70% in online hotel bookings. Smaller OTAs in the Indian market will likely need to reconsider their strategies in response.
OTAs Will Reduce Cash Burn
The last 12 months saw heavy discounting in the hotel segment between MakeMyTrip and Goibibo. As a result, other OTAs were also offering steep discounts by cannibalising their own profits to attract customers. These discounts come directly out of the agencies' pockets.
With reduced competitive intensity, the desperate discount battle for market share is expected to slow down, allowing these portals to reduce their cash burn.
Good News for Direct Bookings
Heavy OTA discounting was the main barrier preventing consumers from booking directly with hotels. A hotel puts up a room for Rs. 1,000 on its website, but an OTA lists the same room at a 20–30% discount or offers hard-to-resist loyalty point deals. Hotels can rarely match that kind of pricing.
If OTAs decide to reduce discounted pricing — even slightly — it presents an opportunity for hotels to attract guests to book directly by offering more realistic discounts or exclusive amenities.
This is an ideal time for hotels to prioritise direct bookings on their hotel website at competitive rates. They can break free from the hefty commission model (up to 30%) and source direct business through their own booking engine at a sourcing expense of less than 10%.
What Hotels Need to Be Prepared With
The important thing is that hotels need both the right tools and the right revenue strategy:
- A well-designed website with good UX, appropriate calls to action, and strong SEO to capture organic traffic from the billboard effect
- An OTA price comparison widget
- A visually appealing booking engine connected to a CRS that ensures zero chances of underbooking
- The ability to sell special packages, add-on services (airport pickups, late check-outs), and promo codes
- Enquiry management that allows hotels to send custom quotes via email and SMS with instant booking options
While the MakeMyTrip and Goibibo merger created a loud noise in the sector, the ripple effects continue to shape the market. If the hotel sector gets its strategy right, it can not only stay insulated from the big waves but emerge as the winner — by owning the guest relationship through direct bookings.
