Longer drives, longer stays: How people holidayed during pandemic

In many ways, the travel industry is a proxy for how the pandemic is playing out around us — with the caseload curve dipping in recent times, revenge travel has kicked in and bookings are reportedly up 30-50% higher compared to the same time last year. In many cases, they are even higher than the pre-pandemic levels.Nobody understands the travel industry better than Deep Kalra, co-founder of Make My Trip (MMT), India’s largest travel booking platform. In a career spanning two decades, Kalra has lived through many crisis moments, honing his leadership muscles. The pandemic was just the latest, and one of the biggest. In the latest episode of After Hours with India Inc, Kalra talks about the sector, his entrepreneurial journey, the many death valleys that the portal has seen and survived, and some important leadership lessons acquired through the years.Listen to Deep Kalra on After Hours with India Inc hereHow did Covid-19 impact the travel industry?It’s fair to say that the industry of travel tourism is probably among the worst-hit industries due to the pandemic, right from the first lockdown in March 2020. After those couple of months, things did open up and the world, India included, learnt to live with the virus. We understood that if you take precautions, you can move out. Some countries handled this better while others didn’t do a good job. If you look at India, we have all the three negatives you don’t want in a pandemic — population, poverty, and indiscipline. So, unfortunately, the pandemic is something that is going to kind of ravage us for time to come. However, we are seeing a lot of pent-up demand between the waves.For example, from November 2020 right up to mid-March this year, there was a pretty strong rebound, albeit only in domestic travel since international travel was still untouched then. So actual bookings came back after the first wave, almost 50% in terms of pre-pandemic and currently, post the second wave, we’re seeing closer to about 35-38% but still growing. medium nocaption87610247 What are the main trends you are seeing in the pandemic era?The first big trend that we saw was driving holidays. People don’t want to take the risk of getting on a plane or a train but are happy to drive out further. If earlier they would have driven 6-8 hours to get to a charming place, they are now willing to drive 10-12 hours. People have actually driven all the way to Kashmir from Delhi, and many are making the Delhi-Manali trip with one stop.Then there was the jump in popularity of homestays. More and more people wanted to stay in villas and apartments rather than staying in a hotel. It all stemmed from a feeling of safety. In a homestay, the number of people you interacted with in terms of staff and other guests was much less than in a hotel. medium nocaption87610192The third big trend was longer stays, more like a working holiday. Given that most offices continued to ask employees to work from home, we found a lot of people take longer duration breaks of a month or two. The logic was, now that we have taken the effort to drive out 10-12 hours and found this safe place, why not continue to work out of here. I know of people who’ve done this for six months by taking a place on rent. Sadly, we were hit by a very deadly second wave in the country so April onwards, things became really bad. But now we are again seeing a nice pickup, starting from the latter part of June right through July. With vaccination coverage increasing, people are now getting bolder and stepping out — especially younger people. What we’ve also noticed is that they are picking options which can be cancelled last minute. So that’s become the need of the hour and we have worked closely with our airline partners, hotel partners and insurance companies to put forward some options where you can actually cancel without any penalty at short notice because that’s the need of the hour. medium87612129What’s the status on the international travel front?We’ve seen bookings shoot up the minute a foreign destination opens up. Maldives, despite being expensive, is a prime example. Before popular destinations like Singapore and Thailand opened up, diehard travellers looked at other avenues. For instance, a lot of people were interested in going to Serbia and Ukraine because they were among the few places that were open to Indians.A recent development that I have found very encouraging is how some of the leading countries in Europe have taken the mature step of allowing double-vaccinated people to come in without any quarantine. It started with Switzerland, and Germany, Spain and France followed suit. So a lot of countries are now opening up.Of course, there’s no guarantee that it's going to last. Two things can go wrong, starting with a spike in the number of infections in India, which can prompt the receiving country to shut borders. The other angle is if foreign countries find a lot of non-native variants coming in from travellers, they will again shut down. One thing that India has not done well is trying to reciprocate all this — non-Indians can’t come in even if they are fully vaccinated. medium nocaption87610283Coming to your company, what are some of the toughest decisions that you’ve had to take through the pandemic?The pandemic was our toughest challenge because it challenged everything at a very fundamental level. What do you do when revenues evaporate completely? In the April-June quarter last year, our revenue stood at 4.5% that of the previous quarter, coming from only emergency travel or accommodations in hotels for quarantine purposes. We were down 95.5%, something we never imagined, and there was no other option. So we went about cutting costs, and ultimately it all worked out but it was very difficult. You can cut variable costs like marketing costs easily, but cutting outsourcing costs is not that easy because you impact some people.We had to relook at our business and its P&L and choose to take voluntary salary cuts. I’m very happy to share that managers and above were ready to take these cuts of 10-50%. My co-founder Rajesh [Rajesh Magow] and I took a 100% cut. But we also realised that there are certain lines of business like our retail stores, which are focused on holidays, which is not going to come back for a long time. If we keep carrying that weight, we are being unfair to others. So after two months of the pandemic, we took the decision to let 9% of our people go. And in my 21 years with MMT, there’s never been a worse or a tougher decision to take. Any advice to aspiring entrepreneurs?If I was to give advice to younger entrepreneurs out there, I would tell them to stabilise one business first — so in that sense, don’t start in multiple lines of business — and then see what more can be done with the customer base. Think more out of the box and try to think about black swan events. Black swan by definition means unexpected events so you can never tell what they will look like but think about it. And think about factors or businesses that may not get impacted by the same axe. Take Covid-19. In a weird way, it has been the biggest blessing for the e-commerce ecosystem. The numbers doubled because all the naysayers who used to sit on the fence suddenly had no option but to switch to online transactions. A similar thing happened with online money transfer. All this fundamentally changed people’s perception and online is a one-way street — once you go online, you generally don’t go back to brick-and-mortar. medium nocaption87610351Another thing I always tell young entrepreneurs is that too many people expect to build a great business in a couple of years. When that doesn’t happen, they quit too early. A lot of the e-commerce companies that are now doing well, not just fundraising but also going public, had their share of near-death moments.But something in the entrepreneur told him or her to carry on and today I am sure they are thanking their stars privately that they hung around to fight another day. So while starting out your company, keep a minimum 4-5 year horizon. It’s unlikely that you will see any great kind of green shoots in 2-3 years.The last thing is to hire really excellent people — don’t skimp there — who can add value. They are your best friends. They are the ones who are going to improve your customer experience and the quality of your decisions so never be afraid of being criticised by these people. medium nocaption87610435How has the India startup ecosystem changed since MMT went public?There’s been a sea change between August 2010, when we had our IPO, and today. It’s chalk and cheese if we were to compare. We listed overseas because at that time there wasn’t any appreciation for an online business in India.In fact, for the longest time in the country, you could only list if you had a track record of profits and every investor here would ask whether the business shows any profit. It was a very EPS-driven system, not growth driven.But suddenly over the past two years, we are seeing appreciation for growth models. After all, the ultimate pools of capital are the same, mostly coming from the West, some from maybe China, and pension funds. And they have found that now the Indian market is taking off.The mature markets of North America, Europe, China have reached their critical mass of online users and have significant credit card penetration. So the next big market is a no-brainer — India.So, yes, the Indian online ecosystem has clearly come of age, and it’s very gratifying to see it. Listen to Episode 11 with Deep Kalra hereListen to all episodes of After Hours with India Inc here or on any podcast platformUntitled Carousel 86776451