India’s Largest Online Travel Agent Just Bought Out its Biggest Competitor

Published on 21 Oct, 2016

Travel Industry Analysis

Other mergers could follow suit to counter the new behemoth.

MakeMyTrip, India’s largest Online Travel Agent (OTA) is set to buy ibibo Group (owned by South Africa’s Naspers) in an all-stock deal for just under $2bn.

With MakeMyTrip dominating the online air bookings segment and ibibo’s solid traction in the hotel bookings segment over the past year (second only to MakeMyTrip) this merger could mean a one-stop-shop for all your online travel booking needs, giving customers an end-to-end seamless service like never before. 

The combined entity is estimated to have ~45% market share in online flight bookings and ~49% market share in online hotel bookings, making it the single largest player in India’s crowded online travel market.   

Overall Indian OTA Market Shares

India’s online travel and tourism industry could be worth $16.5bn by 2020, up from $8.5bn in 2015.

The overall Indian travel and tourism industry in India could be worth about $42.4bn by 2020, up from $25.7bn in 2015.

It’s grown steadily over the past few years as a growing number of Indians with a penchant for travel indulge in some quality time off.

India's Travel Industry (Size in $bn)

This steady surge in India’s domestic tourism is driven by the a number of factors such as:

International tourism is booming as well, spurred by:

  • Evolving business and pleasure destinations in India.
  • Value-for-money, with several economical holiday destinations well within reach
  • Opening up of larger sections of the economy to private sector/foreign investments.
  • Local government initiatives in states such as Kerala, Rajasthan and Gujarat that promote tourism.
  • Campaigns such as “Incredible India” & “Clean India” that have cleaned up the country’s grimy image.
  • Reforms in India’s aviation sector such as the ‘Open Skies Policy’ that encourage greater international airline connectivity.

The Indian online travel market is a highly competitive market right now; existing players are burning through cash trying to boost their own transaction volumes and establish a firm foothold.

If this deal is anything to go by, consolidation could be the only way forward to survive in India’s OTA space.

Going forward, international OTAs such as Expedia and Priceline ( may opt to acquire smaller players as well; especially if they want to lock horns with the new online travel booking behemoth in India's increasingly competitive travel market.