Hotels business has hit a critical mass for ixigo, co confident of triple digit growth in hotels: Group CEO

New Delhi: The hotels business has hit a 'critical mass' for ixigo, even as the company grows in the airline business despite flight macros in the country remaining a ‘bit challenging’, said group CEO Aloke Bajpai in an interview with ET.

“We decided to break out the hotels vertical and disclose it as a separate line of business because we hit a critical mass, crossing 5,000 room nights per day, growing 3.9x year on year,” said Bajpai.

“Very few OTAs in the country have ever crossed that number. I can't think of more than two or three names. In that sense, we think it is time to start breaking this out as a new line of business,” he added.


In an interview to ET in August, Bajpai had said ixigo is 'destined' to be the largest player in the mid market hotel segment over the next four to five years as hotels become the fastest growing segment for the company in terms of gross transaction value (GTV).

ixigo reported a net profit of Rs 63.42 crore for quarter two of this fiscal. Revenue from operations went up 13% year on year to Rs 320.96 crore.

Bajpai said the impact on the company’s top line and GBV from the hotels business is starting to look 'material.'

“GBV from hotels crossed Rs 100 crores, a 159% year-on-year growth. Revenue grew more than 500% (over 6x growth year-on-year), given that we just started building this business two and a half years ago. The take rate is the highest across our business at 12% plus, and that take rate is growing year-on-year,” he added.

He said 86% of this growth comes from the company’s own captive user base—people who book transportation like trains, buses, and flights. “It is not heavily dependent on what happens outside our funnel, but largely within our funnel of 86 million monthly active users,” he added.

He said the flight macros in the country remain a bit challenging because fares are high and airlines like Air India and IndiGo decided to keep capacity on the lower side for the quarter in terms of planes deployed. “Therefore, the overall market saw a 5% to 6% degrowth in the quarter, but we managed to continue growing,” he said.

“Despite that headwind, and despite what is happening in the Middle East, our international flights business actually outperformed and continued to grow at a phenomenal pace. Gross Booking Value (GBV) for international flights grew 59% year-on-year. Bookings for places like Vietnam (Hanoi) doubled year-on-year, while Bali, Colombo, and Bangkok all grew more than 70% year-on-year,” he added.

He said because domestic fares were on the higher side, some people chose similar-priced international trips, and some Middle East traffic got diverted to Southeast Asia or nearby destinations. “That was quite visible,” Bajpai added.

ixigo had strengthened its presence in the hotels business this year through the acquisition of a 54.66% majority stake in flexible stay hotel platform Brevistay, expanding its presence in the flexible and short-stay accommodation segment. The company’s hotel inventory during quarter two stood at over 70,000 properties in India, including over 12,000 directly contracted properties across 1,100 towns.

Bajpai said a large part of this growth is organic.

“A significant contribution is from our own hotel business, which we've been building for 11 quarters. Brevistay is helping us in two ways. They have a business development team that now works closely with our core team to accelerate direct supply onboarding. We onboarded 2,000 properties through them last quarter alone,” he said. “Secondly, we can tap into incremental pools of demand together. The choice of disclosing the segment separately was linked to the fact that it has hit meaningful scale and a place where we are confident triple-digit growth will continue,” he added.