Travel Tech Firm ixigo Targets Hotel Segment for Growth
Indian travel platform ixigo is scaling its hotel booking operations as a new revenue driver, shifting focus from its core rail and air travel business.
Travel technology firm ixigo has transitioned its hotel booking unit into a formal operating segment as it seeks to diversify beyond its core rail, flight, and bus segments. In the second quarter, the hotel division recorded 81 million rupees in revenue, representing 2.5% of the company's 3.21 billion rupee total operating revenue.
CEO Alok Bajpai noted that the company is targeting independent, budget, and mid-market hotels, areas where online booking penetration remains low. The company is leveraging its existing customer base to drive scale, with over 86% of hotel bookings in the second quarter originating from customers already using ixigo for other travel services.
This expansion is financed by steady cash flows from the company's established train and bus divisions. While the hotel segment currently operates at a negative contribution margin, the company reports that profitability has improved year-on-year. The recent acquisition of a majority stake in Brevistay has further bolstered the company's hotel inventory and direct partnership strategy.
However, ixigo faces headwinds in other areas. The flight segment experienced an 8% revenue decline due to high ticket prices and capacity constraints, while rail bookings have reached a mature market share of approximately 64%. Moving forward, the company intends to rely on cross-selling and new product development to sustain overall group momentum.