Ground transport and hotels beat airline seat shortages
- MakeMyTrip earns fees and commissions when travelers book flights, hotels, packages, buses, rail, cabs, and add-ons.
- Hotels and Packages is the largest profit pool, providing about 43% of fiscal 2025 segment adjusted margin.
- Recent performance shows domestic hotels up 20.2% and bus volumes up 23.9%, offsetting weak air supply.
- The company filed draft papers for a potential India listing, creating a major catalyst for investors.
- Myra, its GenAI trip assistant, now independently resolves 50% of customer support calls to help lower costs.
Trips are rising while planes are scarce
MakeMyTrip connects a growing Indian middle class to travel options online. It has an 82 million lifetime transacted user base across three brands. This scale gives it multiple chances to sell flights, rooms, buses, packages, and add-ons to each customer.
The latest thesis shows strong operating strength. While domestic flight capacity is tight and international travel is challenged, ground transport and hotels are growing fast. In the first quarter of fiscal 2027, standalone domestic hotel volumes grew 20.2%, and bus ticketing grew 23.9%.
Air travel remains a pressure point. Domestic aircraft supply suffers from delivery delays and pilot rules. International outbound travel also took a hit from the West Asia conflict and high fuel prices, with first quarter international flight departures dropping 13% year over year.
Two big catalysts stand out. The company confidentially filed for a domestic MakeMyTrip India listing, which could shift how the market values the business. Second, AI tools are now lowering service costs by resolving half of customer support calls without human agents.
Small fees on big bookings
MakeMyTrip operates as an online travel agency. It rarely owns the airplane seat, hotel room, or bus ticket. Instead, it connects buyers with suppliers and earns a fee, commission, or package margin on each booking.
Different trips bring different margins. Air ticketing has a lower take rate around 6.2%. Hotels and Packages bring in more, with take rates around 18%, because accommodations involve more choice and service. This means a shift toward hotels and packages helps profits more than the same amount of flight bookings.
The model scales well when people travel frequently. Customer acquisition costs stay around 5% of gross bookings. With new programs like the OneCircle hotel rewards network, MakeMyTrip hopes to drive repeat bookings and increase the profit of every new user.
The main risk to the model is supply. If airlines cannot fly enough planes, fares rise and travelers stay home. MakeMyTrip can push users toward buses and domestic hotels, but losing high margin international flights still hurts the total mix.
One app for most trip needs
Air Ticketing
Domestic and international flights bring frequent customer visits. The take rate is lower than hotels, and current capacity shortages limit growth.
Hotels and Packages
Includes hotels, homestays, and holiday packages. It carries higher take rates around 18% and grew standalone domestic volumes 20.2% in the first quarter of fiscal 2027.
Bus, Rail, and Intercity Cabs
Ground transport offers cheaper options when flights are expensive. Bus volumes rose 23.9% and intercity cabs grew 40% in the recent quarter.
Corporate Travel
Brands like myBiz and Quest2Travel serve thousands of corporate clients. Happay adds expense management, embedding MakeMyTrip in company workflows.
Myra GenAI Assistant
Myra handled over 8 million conversations in a single quarter. It now resolves half of customer service calls on its own, lowering support costs.
Loyalty and Add-ons
MMT Black, goTribe, and the new OneCircle rewards program help sell more around each trip. These smaller pieces widen the total wallet share.
Hotels now lead the mix
Segment shares use fiscal 2025 adjusted margin from the 20-F. Management uses adjusted margin to compare lines with different accounting. First quarter fiscal 2027 showed faster volume growth in hotels and buses compared to air.
What could break the trip
Domestic air seat shortage
High impact · High oddsAircraft delivery delays and pilot rules reduce flight growth. Fewer seats mean fewer bookings and higher fares that push travelers away.
International travel shock
High impact · Medium oddsThe West Asia conflict and high fuel costs hurt westbound travel. First quarter fiscal 2027 international departures fell 13% year over year. If the conflict lasts, the company loses high margin outbound bookings.
Fuel and currency squeeze
Medium impact · Medium oddsHigh crude oil prices keep airfares high. A weak rupee makes overseas trips costly for Indian travelers. Together, these pressures can reduce discretionary travel demand.
Weather and local disruption
Medium impact · Medium oddsTravel demand falls fast after extreme weather or local unrest. Previous quarters saw weakness after heavy rainfall and safety incidents. Sudden shocks can quickly hurt leisure bookings.
AI fails to improve economics
Medium impact · Low oddsMyra resolves 50% of support calls now, but the true bottom line impact depends on keeping those users happy. If AI resolution leads to frustrated customers who book less, the cost savings will not offset lost revenue.
In one breath
How does MakeMyTrip make money?
It earns commissions, fees, supplier incentives, and package margins when customers book travel. Air ticketing has a lower take rate around 6.2%, while Hotels and Packages is higher at around 18%.
Why are buses and hotels so important for MMYT now?
They help offset weak air supply and high fares. In the first quarter of fiscal 2027, domestic hotel volumes grew 20.2%, while bus ticketing volumes grew 23.9%.
What is the biggest risk for MakeMyTrip stock?
The biggest operating risk is that air capacity stays tight while international travel remains weak from conflict and fuel prices. That limits growth in some of the company's more valuable travel categories.
What could make the thesis better?
A recovery in domestic and international flight capacity would help. Clearer details on a possible India business listing could also improve investor confidence.
