Yatra.com‘s first quarterly earnings release since joining Nasdaq in December shows a 20%+ increase in booking volumes from its air and hotels business.

In the Oct-Dec period, Yatra handled 1.8 million air passengers, up by 23.7% compared with the same period in 2015. Revenue from air was up by 27.2% to INR 943.8 million ($14 million) “due to better volume based deals negotiated with the airlines and higher fixed fee on comparatively lower air ticket  prices”.

For hotels, room night volumes for the quarter came in at 365,000, up  21.3%. Its packages business was flat at 36,000. Revenues for hotel and packages are reported together and were down in the quarter by 4.9% to INR 1,340.3 million ($19.9 million).

Yatra’s listing on Nasdaq allows direct comparisons to be made with MakeMyTrip, India’s biggest OTA which published its results for the same period earlier this week.

On MakeMyTrip’s earnings call, its CEO Deep Kalra said of Yatra:

“I think they are fairly active on both air and packages but our understanding of their hotel business, from what we’ve learned from our suppliers, is still modest and small, and they are not a significant player there. They are more active on air and holiday packages.”

The significance here is that MakeMyTrip has constantly referenced hotels as having massive growth potential in India, with online (including mobile) only accounting for some 15% of India’s hotel market.

And the filings highlight the gap – MakeMyTrip’s hotels and packages transaction volumes came in at 849,000, more than double Yatra’s.

On air, where MakeMyTrip sees Yatra as “active”, the numbers are identical when rounded up, with MakeMyTrip also recording 1.8 million transactions.

(updated 3Feb 1630GMT. The numbers in the paragraph above are incorrect and have been replaced with the correct figure below. The original headline has also been amended. Apologies for the mistake.)

On air, Yatra’s 1.8 million transactions in the quarter compares with MakeMyTrip’s 2.3 million.

Yatra’s net revenue margin on air of 6.8% is lower than MakeMyTrip’s 10.1%. And it also falls behind when it comes to hotels and packages margins – Yatra’s 10.8% significantly underperforming MakeMyTrip’s 19.4%.

Overall, Yatra and MakeMyTrip’s combined net revenue margins are 8% and 13.1% respectively.

Another important comparison to make is their respective marketing and sales expenses. MakeMyTrip has been saying for a number of quarters that its priority is growing market share and that it is willing to invest in acquiring new customers.

In the Oct-Dec period, its sales and expenses rose by 53.8% to $44.5 million, “primarily as a result of significant customer  inducement/acquisition programs [given to customers for accelerating growth in our standalone hotel booking business] along with an increase in brand advertisement expenses and mobile application download and referral cost.”

Yatra meanwhile lifted its sales and marketing spend by 46.8% to INR 612 million ($9 million) “primarily on account of increases in consumer promotion and loyalty incentive programs.”

MakeMyTrip is already the biggest online player in India and that dominance will strengthen via its merger with Ibibo Group. Spending five times as much on marketing as Yatra also reinforces its number one slot.

But with a number of external tailwinds in play for online travel in India – a strong economy, a digitally aware government, a young population and an improving mobile infrastructure – there is enough room for more than one player.

Yatra can take heart from a strong air ticketing business performance but needs to be prepared for a long (and expensive) battle for hotels.

Click here to see Yatra’s Q3 release.

Related news from Tnooz:
Yatra opens marketplace as part of new look (Jan17)