Skift Travel News Blog

Indian carrier Vistara reported its first-ever net profit for the quarter ending December 2022, according to statement from the airline on Monday.  

The full-service carrier, a joint venture of Tata Sons and Singapore Airlines, reported break even for the first time since its inception in 2015 as it crossed the $1 billion revenue mark and remained earnings before interest, taxes, depreciation, and amortization positive in the current fiscal year.

In 2022, Vistara reported that it grew its international network by over 180 percent adding seven routes including three new destinations — Muscat, Jeddah and Abu Dhabi.

The airline said that it grew its domestic network by over 50 percent, by adding six new routes and two new destinations — Coimbatore and Jaipur.

While the airline did not share numbers, but for the quarter ending December 2022, it reported a 37 percent growth in capacity and a passenger increase of 47 percent compared to the same period last year.

Since July 2022, the airline has maintained its position as the second largest domestic airline in India, flying more than 11 million passengers in the calendar year 2022.

Vistara also registered a 11 percent year-on-year growth in the member base for its frequent flyer program — Club Vistara.

The airline currently operates close to 8,500 flights per month.

“With significant network and fleet expansion and sustained growth over the last few months, 2022 has been a phenomenal year for Vistara, in terms of our operational and financial performance,” Vinod Kannan, Vistara CEO, said.

Vistara is also getting ready for a merger with Air India, the erstwhile Indian state carrier, that had been acquired by Tata Sons, via its subsidiary, Talace, early last year as part of a $2.4 billion deal.

The Vistara-Air India merger is said to be completed by March 2024, following which Air India shall be India’s largest international carrier and second largest domestic carrier with a combined fleet of 218 aircraft.

Keen to pursue its long-anticipated initial public offering (IPO), hospitality tech company Oyo has said it would be refiling its draft red herring prospectus with the Indian stock market regulator Securities Exchange Board of India (SEBI) by mid-February.

While the company refused to offer any estimation of the time it expects SEBI to take for the approval, a source close to the company said Oyo hopes to get the approval by April 2023.

“After the approval comes in, Oyo will gauge market conditions and the path to profitability and then decide on launching the IPO,” the source said speaking to Skift.

Asked to hint at a timeline for the launch of the Oyo IPO, the source said it would well be within this year.

The market regulator had on December 30 asked Oyo to refile the draft prospectus, updating all the relevant sections such as risk factors, key performing indicators, outstanding litigations and basis for offer.

The company had earlier indicated that the process of refiling the document could take up to 2-3 months.

Oyo’s last submission to SEBI was the updated financial results of the first half of financial year 2022-23.

Updating its draft red herring prospectus with results for the first half of the 2023 financial year in November, Oyo had reported that its adjusted earnings before interest, taxes, depreciation, and amortization for the second quarter grew eight times from $860,000 in the first quarter to $7 million primarily driven by a 23 percent quarter-on-quarter rise in gross booking value per hotel.

The letter from the market regulator to Oyo read, “The disclosures contained in the present draft red herring prospectus do not take into account the material changes/disclosures arising from updated financial statements as filed through
addendums leading to revised period for disclosures which in turn leads to necessities to make material updates in risk factors, basis of offer price, outstanding litigations and update other relevant sections of the prospectus.”

Sharing the progress on the refiling exercise, an Oyo spokesperson said, “We are working on updating all key sections simultaneously. Responsibilities have been divided among different teams,
with senior company leaders driving the collaboration with the book running lead managers, essentially the initial public offering bankers, the lawyers and the auditors. We are keen on refiling the draft prospectus by mid February if not earlier.”

The Indian market regulator’s move seems to be in line with its expectation of higher levels of transparency in the initial public offering process.

Lately, it has asked companies to share additional key performing indicators and the basis for pricing of IPOs. In its meeting with bankers in December 2022, SEBI had also shared steps it is taking to reduce the IPO processing time which has increased to 113 days.

India is making a PCR Covid test mandatory for inbound arrivals from China, Singapore, Hong Kong, Thailand, Japan, and South Korea, from January 1.

Passengers arriving in India from any of these six countries would be required to upload results of tests not older than 72 hours before departure along with a self-declaration on the Air Suvidha portal.

However, at the time of writing this story, the Air Suvidha portal was still not functional and the message reads, “You no longer need to complete the Air Suvidha Form.” 

Launched in August 2020 for international passengers to submit a self-declaration of their health status, the Air Suvidha portal, a digital health and travel document, had been discontinued in November this year.

Fearing another Covid surge, India had been conducting random tests of around 2 percent of international passengers flying into the country.

On Wednesday, officials at the Indian health ministry informed that of the nearly 6,000 passengers tested over the last three days, 39 were found to be positive.

Oyo, in preparation for its upcoming IPO in 2023, is doing a major reorg of its organizational structure and cost base. It has announced it is letting go of 600 employees out of a total of about 3700, mostly in its product and tech teams. From the company:

“Oyo is downsizing its product and engineering, corporate headquarters and the Oyo vacation homes teams, while it adds people to the partner relationship management and the business development teams. Oyo will downsize 10% of its 3700-employee base, which includes fresh hiring of 250 members and letting go of 600 employees…The downsizing in tech is also happening in teams which were developing pilots and proof of concepts such as in-app gaming, social content curation and patron-facilitated content. Additionally, members of projects which have now been successfully developed and deployed such as ‘Partner SaaS’ are being either let go or are being redeployed in core product & tech areas such as AI-driven pricing, ordering and payments.”

OYO, as a part of its integration of various functions of its European vacation homes business progresses, is downsizing in some parts of the business to increase efficiency and harness synergies, the statement added. The startup has also reassessed its corporate headquarter base and is merging roles and flattening team structures.

Booking Holdings is hiring rapidly at its new engineering office in Bengaluru, India, to work on new projects such as how to verify guest identification with machine learning and new products such as alternative forms of international payment to traditional credit and debit cards.

The parent company of Booking.com has about 20 employees at its tech center now but expects to ramp that up to about 100 by year-end, according to The Times of India. The business unit will work on how to use artificial intelligence and machine learning to better manage risks and hassles in travel transactions.

The company wants to verify IDs such as passports and driving licenses by linking the company to sources of identification data and using artificial intelligence and machine learning to scan these and verify identities automatically.

That is one of the projects that the Bengaluru office will tackle, Daniel Marovitz, senior vice president of fintech at Booking.com, told The Times of India.

The team will also look at possibly building a “foreign exchange card” as an alternative form of payment to a traditional credit or debit card. Today, many credit and debit cards charge a different, higher foreign exchange rate than the lowest available on the market.

The planned Booking.com product would attempt to offer a cheaper alternative. The ambition is for customers to use the card, which will come in physical and digital forms, for routine purchases and not just for booking a hotel. It may eventually enable customers to take advantage of buy-now-pay-later and other insurance-like products that Booking Holdings might operate on its own as a financial technology player.

Both projects fit with Booking Holdings CEO Glenn Fogel‘s vision for “a connected trip” that he laid out at Skift Global Forum in September (see video).

The news of the product testing and development dovetails with recent Skift Megatrends about the financialization of travel and how the rise of global mobile wallets are upending travel payments.

India’s competition watchdog has fined online hotel-booking company MakeMyTrip Group about $27 million (₹223.48 crore) and hotel chain Oyo about $20 million (₹168.88 crore) for anti-competitive behavior.

The Competition Commission of India (CCI) has been investigating the companies since 2019, after a hotel body alleged that MakeMyTrip gave biased preference to SoftBank-backed Oyo on its sites and mobile apps.

OYO and MakeMyTrip said they were reviewing the order. Both companies said they believed their business practices were fair and lawful.

Some backstory, first: In October 2015, MakeMyTrip blocked its main competitor in the budget category, Oyo, from displaying listings on its site and apps.

MakeMyTrip had boycotted Oyo to nurture its attempt at branded budget booking properties, GoStays, and because it didn’t like how Oyo was using deep discounting to woo travelers to book directly instead of via agencies.

But the record-breaking growth, fueled by record-breaking funding, appeared to prompt MakeMyTrip to change its mind about the fight.

Smaller Oyo competitor brands, such as Fab Hotels and Treebo, disappeared from MakeMyTrip’s sites and apps.

In 2019, a major hotel lobby, the Federation of Hotel and Restaurant Associations of India (FHRAI) alleged that there were deals between Oyo and MakeMyTrip that gave preferential treatment to Oyo and thus were restricting market access to rivals such as Fab Hotels and Treebo and some other independent hotel operators with franchises in these brands.

“The Commission is of the view that the commercial arrangement between OYO and MMT-Go which led to the delisting of FabHotels, Treebo and the independent hotels, which were availing the services of these franchisors, was anticompetitive,” the CCI said in its order, accusing MakeMyTrip Group of misrepresentation the information on its site as being comprehensive and fair.

It was alleged that MakeMyTrip Group charged exorbitant commission brokerage fees to be listed for smaller players while offering Oyo comparatively favorable terms.

The commission held that MakeMyTrip and its sister brand GoIbibo held 63 percent of the domestic hotel online market share in 2017, which was the last time a new entrant, HappyEasyGo, debuted in the market.

Parity provisions in contracts, combined with discounting by online travel brands, were another area that the commission critiqued.

MakeMyTrip Group has put into contracts with hotel suppliers requirements for price parity hotel partners, where hotels can’t sell their rooms at any other online travel agency or on their own direct booking channels at rates below MakeMyTrip Group’s. Yet the online travel company retains its right to flex rates up and down to drive demand, such as offering rates below the average room rate.

It is likely MakeMyTrip Group and Oyo will appeal the regulator’s decisions.

Among their many complaints, the companies said in recent statements the investigation is devoid of any useful economic analysis and several concepts have been wrongly applied. MakeMyTrip Group also said it cannot be considered dominant in the online booking market when one looks at the bigger picture.

Evolving the ever-popular Buy Now Pay Later model, one travel company is now offering up to 20 percent interest to customers willing to bank their deposit with it.

India’s EaseMyTrip is calling the concept “Save Now Buy Later” and the investment solution offers a bank-like interest rate on the customer’s cash. It claims its new “Systematic Investment Plan” is a travel industry first.

However, customers must invest on a recurring basis. The minimum period is 90 days, after which the collected amount can be redeemed to book a vacation package or a hotel stay. The maximum duration of the investment is two years or $600,000, whichever is achieved first for both domestic and international travel.

EaseMyTrip also provides Buy Now Pay later for its customers.

“Our constant endeavour is to ease our customers’ travel experience in whichever way possible and we are certain that this new investment scheme will enable them to take their holiday and stay from their return on investment,” said chief operating officer Lokendra Saini

India’s High Commission is enforcing rules that require in-person visa applications for British citizens — a move that has caught out many in the travel industry.

Previously it turned a blind eye to visas that were being processed in batches, according to one specialist tour operator.

But on Oct. 7 the High Commission in the UK stated applicants must attend visa centers in person, as it had noticed “unauthorized agents and individuals are illegally charging fees and collecting India visa applications for submission at VFS Centres, misleading applicants and misrepresenting the services they can legally provide.”

Source: High Commission of India, London

Thousands of travelers may now be forced to cancel their holidays, as appointments at visa centers are booked out in advance.

“There were a set of visa companies who would enter without an appointment, with 20 or 30 passports,” said Amrit Singh, co-founder and managing director of UK tour operator TransIndus. “They were being processed. All of a sudden, somebody higher up has realized that this is breaking the rules. So they’ve put a stop to it.”

She said TransIndus was now unable to accept new bookings until January. “The bigger problem is that we can’t take any fresh bookings. We couldn’t book a holiday for a client knowing there’s no opportunity for them to acquire a visa,” Singh said.

For clients traveling beyond January there was still time, but for those traveling between now and December it was “a real issue.”

“It was a casual arrangement (before) that the visa services carved out for themselves, with the local offices. I don’t think it was a formal arrangement sanctioned by the local High Commission,” Singh added.

The UK’s Association of Independent Tour Operators said 1,500 bookings through its own members worth $10 million were affected, according to reports.

According to The Times, VFS Global, which runs the processing bureaux, said the decision to insist travellers present in-person had been made due to the high number of administrative errors made by the third-party visa companies.

India currently offers 156 countries access to an online visa application process, which is similar to the U.S.’ Electronic System for Travel Authorization. It reintroduced e-visas in March this year, after Covid-19 cases decined. But UK and Canada nationals are currently excluded from this e-visa system, along with residents from Algeria, Burkina Faso, Lebanon and Pakistan.

However, as the UK government continues talks over a Free Trade Agreement with India, there are hopes the UK could be included, with “mobility and migration” under discussion on both sides.

One commentator has suggested that India’s decision to clamp down on visas was retaliation over UK home secretary Suella Braverman’s comments she had “concerns about having an open borders migration policy with India.”

“There is some discussion of a trade deal being finalized by Oct. 24. Perhaps the e-visa is a part of that negotiation,” Singh said.

In the meantime, individuals wanting an Indian visa can appoint another person to attend one of the nine visa processing centres in the UK, via a formal letter of authorization.

The U.S. is also facing delays issuing its own visas, which could prevent 6.6 million people from traveling there next year, resulting in a loss of $11.6 billion in spending, economists have warned.

The historically strife-torn regions of Jammu and Kashmir in India welcomed 16.2 million visitors so far this year, the most since British colonial rule ended in 1947, Reuters reported.

Largely driven by local tourists after Covid restrictions were lifted earlier this year, the tourism high mark was applauded by India Prime Minister Narendra Modi’s government as a great stride forward.

Modi withdrew Muslim-majority Jammu and Kashmir’s special rights in 2019, stripping it of its status as a state, a move that he said was about integrating the region with the rest of the country.

Tourism has always been an important part of Kashmir’s economy even when violence and danger were deterrents, as Skift reported in 2019.

India’s trade and tourism minister, Piyush Goyal, was ecstatic over the new tourism surge.

Foreign tourists still need a special pass to visit most parts of Jammu and Kashmir, according to the Reuters report.

SoftBank Group has reportedly cut the valuation of Indian hotel-booking platform Oyo by more than 20 percent, Bloomberg reported on Thursday quoting people familiar with the matter.

According to the report, the Japanese investor, who owns 45 percent of Oyo, cut its estimated value for initial public offering-bound Oyo to $2.7 billion in the June quarter from an earlier $3.4 billion. In 2019, Oyo had been valued at $10 billion.

The $2.7 billion valuation is lower than the $3.23 billion that Oyo has been able to raise through primary and secondary equity and debt funding rounds from investors. 

Calling the valuation markdown a speculation and “patently incorrect,” Oyo said that having clocked $1 million in earnings before interest, taxes, depreciation, and amortization in its fiscal 2023 first quarter, there is no rational basis for a markdown.

“A 41 percent gross profit margin and a 45 percent increase in gross booking value per hotel per month compared to the last financial year are dramatically improved results and the strong performance trajectory is expected to continue,” Oyo said in a statement.

Earlier this week, Oyo updated its initial public offerings application to the Indian regulatory body — Securities and Exchange Board of India (SEBI). The company originally planned to raise around $1.16 billion through the initial public offering, seeking a valuation of around $12 billion.

Oyo said that SEBI has given the company permission to file updated financials till the September 2022 quarter and Oyo would initiate the approval process post the filing of its audited numbers. “We have not decided the exact timing for the IPO and the IPO valuation is also highly speculative,” Oyo added.