Yatra.com, an Indian online travel agency, reported a 5% quarterly revenue decline due to intense price competition in the consumer business. This competition was primarily driven by IndiGo, the country’s largest airline, offering deeply discounted fares exclusively on its website and mobile app. In response to these challenges, Yatra’s CEO, Dhruv Shringi, announced a cost-cutting initiative that includes laying off over 100 employees to streamline operations. Adjusted air-ticketing margins fell by 21% reflecting the impact of the challenging market environment.
Despite the setbacks in the consumer segment, Yatra is focusing on strengthening its core strength in corporate travel. The company secured 34 new corporate customer accounts with an annual billing potential of INR 2,028 million ($24.2 million). Yatra is actively exploring strategic opportunities to enhance its corporate travel segment through acquisitions, with $20 million earmarked from its India IPO proceeds for this purpose. However, Shringi noted that the timeline for any potential acquisition is uncertain, and there is no commitment to an imminent deal at this time.
Yatra also made progress in the Meeting, Incentives, Conferences, and Exhibitions (MICE) segment with a newly onboarded team ramping up operations. While contributions were modest for the June quarter, early indicators for the September quarter show promise. Despite these positive developments, Yatra’s adjusted EBITDA for the quarter decreased to INR 65.6 million ($781,000) from INR 115.4 million ($1.4 million) the previous year. Shringi attributed this decline to lower volumes and increased expenses related to onboarding teams for new initiatives.
The company emphasized the importance of accelerating its investment in the corporate space as India’s largest airline intensifies price competition in the consumer market. Yatra aims to capitalize on the growing MICE market, which is valued at $3.3 billion in 2023 and expected to reach $10.5 billion by 2030. Despite the challenges, the company expects the benefits of cost-saving measures to materialize starting in September. Yatra is also simplifying its corporate structure and focusing on improving shareholder value through a board-appointed restructuring committee.
In addition to its efforts in corporate travel and the MICE sector, Yatra launched an expense management solution called RECAP to improve expense tracking for corporate clients. The platform leverages cutting-edge technologies, including generative AI, to enhance the user experience. With a focus on innovation and strategic expansion, Yatra is determined to overcome the challenges in the consumer segment and strengthen its position in the corporate travel market. While the road ahead may have uncertainties, the company’s proactive initiatives demonstrate its commitment to growth and sustainability in the competitive online travel industry.
