Travel tech startups roar back to life post Covid slump – The Financial Express

The travel tech space is fast recovering from the blows dealt by the pandemic. The turnaround can be seen in the more stock market debuts, better financial results and fund-raises. Investments into a clutch of eight startups have been of the order of $73 million in 2024 as against $36.1 million in H12023, according to Tracxn.

Gross bookings at NASDAQ-listed MakeMyTrip hit $2 billion in Q4FY24 up from $1.67 billion in the year-ago period. The firm reported a profit of $216.7 million in FY24 against a loss of $11.2 million posted a year ago.

Indeed, the opportunity in the sector has seen startups mushrooming with close to 1,500 players at the last count; of these 11 were founded in 2024, according to Tracxn data.

According to PrivateCircle Research while in FY21, 5 prominent traveltech players had seen their revenues fall by an average of 43% over FY20, in FY23, their average revenues grew 80.8%. These companies include Ixigo, Easemytrip, Yatra, Goibibo and MakeMyTrip.

“The dip in revenue during the pandemic drove travel startups to innovate. This is why despite the prevailing funding slowdown, traveltech remains resilient,” Prateek Toshniwal, co-founder, IVY Growth Associates told Fe.

Several traveltech firms, which include online travel agencies (OTA) and hospitality startups, recorded a 25%-30% surge in bookings for air travel and accommodations around New Year, say experts. The number of users also went up by 40%. “Post-pandemic, we have noticed a huge shift with consumers more keen on buying experiences. This is pushing up growth,” said Toshniwal.

According to a report by Global Information Inc, the India online travel market was pegged at $17.24 billion in 2024 and is expected to reach $28.40 billion by 2029, growing at a CAGR of 10.5% during 2024-2029.

Oravel Stays, the parent company of hospitality major Oyo, posted a profit-after-tax (PAT) of $12 million in 2023-24. EaseMyTrip also reported an increase in its operating revenue at ₹164 crore in Q3FY24, from ₹160.7 crore in the previous quarter. CEO and co-founder Nishant Pitti, told FE the startup is focusing on expanding the offline presence. “This allows us to reach a broader audience and provide a more personalised customer experience,” he said. In Q4FY24, hotel bookings on its platform surged by nearly 39%, and other non-air segments saw a 53% increase.

Many startups have listed on the bourses over the past year. OTA ixigo listed on June 18 while global B2B travel distribution platform TBO Tek listed on May 15. Aloke Bajpai, CMD and group CEO, ixigo said, the company crossed 480 million annual active users cumulatively across the group in FY24. “We also saw a 30.8% growth in our revenue from operations,” Bajpai said.

He noted the increase in first-time international travellers has also driven up demand. “We have seen a rise in first-time flyers for both domestic and international travel. For international getaways, visa-free destinations have become quite popular amongst Indians, especially first-time flyers,” he said. ixigo has seen flight searches to popular visa-free destinations like Thailand, Malaysia and Mauritius increase by 50-80% in June this year as compared to February 2024.

EaseMyTrip also saw a 10% increase in first-time international travellers over January-May as compared to the same period last year. “The trend is gaining momentum rapidly and we are optimistic about its trajectory. Everybody is realising the potential of first-time flyers who can become their loyal customers in the future,” Pittie said. To capitalise on this opportunity, traveltech startups are increasingly leveraging artificial intelligence (AI), data analysis, machine learning (ML) and GenAI (generative AI) to offer deals and tailored packaging. This has enabled businesses to develop more sustainable models that would require less capital investments, point out experts.