Skift Take

The Indian Union Budget last week was a disappointment, but there was a bright spot with IndiGo, MakeMyTrip, and IHCL all reporting profitable quarters in their earnings calls.

Peden Doma Bhutia

Skift Asia Editor Peden Doma Bhutia and India Reporter Bulbul Dhawan unpack some of the biggest takeaways from the recent Union Budget announced in India as well as the earnings calls of IndiGo, MakeMyTrip, and the Indian Hotels Company Limited (IHCL). Find out how the budget fared compared to the expectations of the travel industry stakeholders in this latest episode of the Skift India Travel Podcast.

Key Points

Indian Budget and Tourism Sector: The 2025 fiscal year budget, presented by Finance Minister Nirmala Sitharaman, fell short of the travel industry’s expectations. The budget focused on developing temple destinations in Bihar and Odisha as a tourism hub. Key industry demands, like industry status for tourism and a uniform tax rate for hotels, were ignored. Madhavan Menon of Thomas Cook (India) expressed disappointment over the lack of reinstated advertising budgets for inbound tourism, previously slashed by 97%.

Taj-Parent IHCL gets Into Branded Residence: Indian Hotels Company Limited (IHCL) is entering the branded residences market, starting with Taj Branded Residences in Chennai. CEO Puneet Chhatwal highlighted this segment’s lucrative potential, valued at INR 220 billion ($2.6 billion) and growing annually. IHCL plans to launch the reimagined Gateway brand with 15 hotels, scaling to 100 hotels by 2030. The company aims to open 25 hotels this fiscal year, with 7 already opened.

IndiGo’s Premium Shift and Digital Upgrades: IndiGo is enhancing its digital platforms, introducing an AI booking assistant on WhatsApp. The airline plans to offer in-flight entertainment through its app, currently being tested on the Delhi-Goa route. Despite a 12% drop in net profit to INR 27.3 billion ($326 million) for the quarter ending June 30, IndiGo is expanding international routes. IndiGo will increase flights to Central Asia and potentially more destinations, aiming for double-digit growth in fiscal 2025.

MakeMyTrip’s Focus on Rising Middle Class: MakeMyTrip achieved its highest-ever quarterly gross bookings, revenue, and adjusted operating profit, with gross booking value exceeding $2.4 billion, a 22% year-on-year growth. CEO Rajesh Magow attributed this to India’s rising middle class, increased disposable income, and changing travel behavior. Emerging destinations like Turkey and Kazakhstan are seeing significant increases in Indian tourists, indicating a positive long-term outlook for outbound travel from India.

Episode Summary

In this episode, the discussion centered on the recent earnings reports and the 2025 fiscal year budget. The Union Budget left the travel industry in India disappointed due to its lack of significant measures for tourism, such as industry status and a uniform tax rate for hotels. Madhavan Menon of Thomas Cook (India) expressed dissatisfaction over the lack of a reinstated advertising budget for overseas promotion of inbound tourism.

Indian Hotels Company Limited (IHCL) announced its foray into the branded residences market with its first Taj Branded Residences in Chennai. CEO Puneet Chhatwal noted the market’s significant growth potential. IHCL also plans to launch the reimagined Gateway brand and open 25 hotels this fiscal year.

IndiGo, continuing its premium shift, introduced significant digital upgrades and plans for in-flight entertainment. Despite a 12% drop in net profit, the airline is expanding its international routes and aiming for double-digit growth in fiscal 2025.

MakeMyTrip reported record-breaking earnings, with a 22% year-on-year growth in gross bookings. CEO Rajesh Magow highlighted the influence of India’s rising middle class and changing travel behavior on domestic and outbound travel trends, with emerging destinations like Turkey and Kazakhstan seeing a surge in Indian tourists.