Yatra Business : Key focused on delivering OTA (Online Travel Agent) to the B2B (business to business which includes business to enterprise and business to agents) & B2C business
1. Opportunity Size
2. Key Points
3. Moat
4. Process
5. Management Track
6. Outlook
Opportunity Size:
1. DHRP/IBREF/CRISIL Industry Report :
a. By 2028 India Tourism is projected to reach 4540-4560 billion
b. By 2028 online travel market in India is projected to reach US$ 3335 billion (Yatra DHRP)
c. Tourism is the third largest foreign exchange earner for the country.
d. B2B Market expected to grow at 2x the overall travel market and approximately double over the next 5 years driven by:
GDP growth: IMF projects 6.8% growth in GDP for India in 2023, implying higher business activity, and related travel
GST implementation: ~10 Mn companies in India with registered GSTIN – greater scope for organized TMCs
Growth in MICE: High margin (~20%) & high demand frequency; expected growth in off-sites, dealer meets
Highly fragmented market shifting towards online & organized segment
▪ Extremely fragmented and a large population of corporates are handled in an analog, inefficient manner with no digitization
▪ Top 13k companies account for 28% of volume
▪ Yatra is the largest player with 6% share of the 13,000 Mid-Large Enterprises
▪ Travel does tend to be closely linked to the growth in GDP and over the past decade, travel has been growing anywhere between 1.5x to 2x of GDP growth so the travel industry growth would be 6.0% or more
1. YATRA Business
a. B2B (Business to Business which includes business to enterprise and business to agents)
b. B2C (Business to Consumer)
c. Forex - Aiming to get Forex License
d. Visa
e. Activities
f. Travel Insurance
g. Monument/Cultural/Heritage visit
Key Points :
1. Yatra business was not doing well at B2C main reason was because of funds
2. Yatra is doing perfectly well at the corporate end and had about 813 large corporate customers and over 49,800 registered SME customers
3. Yatra ranks 3rd in India
4. Yatra has the highest tie up with Hotels & Accommodation at domestic market with about
a. 2,105,600 tie-ups, as of March 31, 2023 (Source: CRISIL Report)
5. Yatra has 29,800 agents in above 1,000 cities across India as of March 31, 2023
Business Strategy
1. Proprietary eCash loyalty program that enables travellers that book through the platform to accumulate and redeem points
2. The company currently have about 7 million eCash registered users on their platform.
3. The company first focus was to have a B2B corporate presence firstly then move to B2B – which is a very good move as they are not dependent on customer front only
4. They have forex partnership and provide forex to B2B only
5. They provide Outbound to Outbound to B2B only meaning China – Hongkong
6. Majority of the travel is Inbound to Outbound meaning – India to US or elsewhere
7. IT/ITES : Contribute to 10% topline growth
8. Corporate accounts carry a potential annual billing of about INR 813 million
9. Yatra has the largest number of hotel and accommodation tie-ups, with 2,105,600 tie-ups in March 31, 2023.
10. Currently 40% and 45% coming from B2B and about 55% to 60% coming from B2C
11. Yatra has holiday advisories and agents who helps in delivering smooth customer experience
12. Recently they have announced Yatra Prime package for travellers to assist in all ways from airport to any site.
Share of market
• India 70%
• International 30%
• Domestic market our market share would be close to between 7% and 8%
• Growing at about 20% faster rate than the industry
Risk
• Sales promotion expenses
• Customer promotions and loyalty program costs
• Payment expenses
• Overall TTV increment
• Cost cutting exercises which you they planning in the next 6 months apart from the savings and finance cost
• Credit cards would be the highest cost
• ESOP cost in quarter 3, 2024
• Cost for selling shareholders for the OFS component
• Cost knocked off against share premium
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