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Published on : Friday, October 21, 2016
The Indian travel website MakeMyTrip has recently acquired their rival company Ibibo Group in order to dominate the entire Indian hospitality industry. Ibibo has signed contract to merge the stock transactions.
According to the industry experts, the combined value of the entire entity is estimated to be between $1.8 billion and $2 billion. The merged entity will now dominate the industry with a market share of 50-60 per cent.
The CEO of the rival company Stayzilla, Yogendra Vasupal has stated, “Nature abhors vacuum, and with MakeMyTrip and GoIbibo coming together, there’s no longer a number two in the market.”
The managing partner at Prognosis Global Consulting, Siddharth Thaker has informed, “It spells trouble for competitors, especially if the merged brand decides to position itself as a surrogate brand, which these guys are definitely doing. The average commission from air ticketing has shrunk to less than 6% over the past seven years, and the shift to hotels is more of a compulsion than strategy.”
According to analysis, the gross margins from the travel and hotel packages after the merger may range from 10 per cent to 25 per cent, where the company may earn 5 percent to 10 per cent from flight ticket bookings.
The industry experts believe that the merged company may soon have gross bookings of $3 billion to $3.5 billion than their rival company Yatra.