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MakeMyTrip Limited (NASDAQ:MMYT)

Q4 2014 Results Earnings Conference Call

May 21, 2014 10:00 AM ET

Executives

Deep Kalra - Group Chief Executive Officer

Rajesh Magow - Chief Executive Officer, India

Mohit Kabra - Chief Financial Officer

Analysts

Kevin LaBuz - Deutsche Bank

Manish Hemrajani - Oppenheimer

Hitesh Das - Barclays

Operator

Welcome to MakeMyTrip Fiscal 2014 Fourth Quarter and Full Year Earnings Call. The company wishes to remind you that certain statements made on this call are considered forward-looking statements within the meaning of the Safe Harbor provision of the U.S. Private Securities Litigation Reform Act of 1995.

Forward-looking statements are not guarantees of future performance and by their nature are subject to inherent uncertainties. Actual results may differ materially. Any forward-looking information relayed on this call speaks only as of this date, and the company undertakes no obligation to update the information to reflect changed circumstances.

Additional information concerning these statements are contained in the Risk Factors and Forward-Looking Statements section of the company's annual report on Form 20-F filed with the SEC on June 13, 2013. Copies of this filing are available from the SEC or from the company's Investor Relations department.

And now, I would like to introduce the speakers from MakeMyTrip, Deep Kalra; Rajesh Magow; and Mohit Kabra. Please go ahead.

Deep Kalra

Thank you. And welcome everyone to our fiscal 2014 fourth quarter and full year earnings call. I would like to start by thanking my colleagues at MakeMyTrip and our business partners for their contribution and support this past year.

During fiscal year 2014, we made significant progress on our key strategic objectives. This include rapidly improving our revenue mix towards hotels and holidays packages, accelerating our presence on mobile and integrating the recently acquired businesses to drive synergies within the group.

It is noteworthy that we did not waiver in our long-term strategic focus despite the challenges presented to us in a volatile airline industry and uncertain macro political environment.

As we enter fiscal 2015, we are confident of India’s long-term growth prospects as a newly elected single-party majority government should bring about the much needed growth reforms through faster policy making.

We also remained optimistic on domestic and outbound travel growth, the indivisible rise of internet penetration and resulting adoption of e- and m-commerce in the country. We will therefore continue investing and executing and extending our market leadership in online travel in India for the long-term.

In fiscal 2014, we achieved $1.26 billion in total gross booking and reported more than $106 million in net revenue or revenues at service costs, which represented growth of nearly 32% year-on-year in constant currency terms. Additionally, we improved our net revenue mix to 41.7% contribution from our non-air businesses, a material improvement from the 35.6% mix in the last fiscal year.

In the fiscal fourth quarter we also announced the acquisition of EasyToBook.com based out of Amsterdam and Tel Aviv. This acquisition will further broaden our inventory of hotels outside of India, provide synergies in online hotel technology development and faster increase customer travel between India, Europe and Southeast Asia by leveraging our hoteltravel.com assets.

Now let me share the progress we have made with our mobile strategy. To date we have seen more than 3 million downloads of MakeMyTrip apps, which have full booking capabilities for flights, hotels and bus ticketing across all major platforms. To date, mobile accounts for more than 19% of our monthly unique visitors and 15% of online transactions.

In domestic flights, mobile bookings account for 15% of total online transactions, while standard hotel bookings from mobile represent 27% of total online domestic hotel transactions.

The latest forecast by IEMAI makes the total internet users in India at nearly 240 million, with mobile internet users accounting for more than three quarters of that number. We believe that the run rate for mobile growth is long and we have consequently made mobile an important strategic priority for the business. We will continue dedicating more effort and resources towards enhancing our mobile user’s experience.

As an example of our progress, we launched our first native app on the Android platform in mid-March, which was followed up by our iOS native app launched this past week. These native apps provide a smoother user experience, increase personalization and allow faster access to relevant information.

I would now like to share some positive developments in the air industry. Two weeks ago Air Asia India received the final approval required to launch an airline in India i.e. the air operator permit from the DGCA. It also appears likely that the other new entrants Tata Singapore Air should receive its air operator permit shortly.

We believe the launch of two new domestic airline will help bring down the currently expensive air fares and stimulate air travel demand within India. At the same time, we are cognizant of the fact that it may take few quarters before we see a material effects from these developments on our business.

In closing, I would like to share that with most, with our most recent public equity capital fund raising, our balance sheet is now stronger than even. These incremental resources will allow us to choose the right investment in the business for our customers and to pull further ahead of competition.

Now Rajesh will share some highlights of the past quarter and fiscal year.

Rajesh Magow

Thanks, Deep, and hello, everyone. As Deep has said earlier, in the fiscal fourth quarter and full year we delivered strong operating and financial results, despite facing difficult and volatile operating conditions. Our sharp customer focus and execution speed continues to help us stay ahead of the market and maintain our leadership position.

In the seasonally slow fourth quarter, we achieved year-on-year revenue in best service cost growth of 45.1% on constant currency terms. This performance helped us to gain full year revenue less service cost of $106.4 million, representing growth of 31.6% on constant currency terms, which exceeded our guidance and internal plan.

While our accomplishments reflected stronger than planned performance across our product portfolio, our results also reflected our acquisition of EasyToBook.com during the quarter.

In Q4, I am pleased to share that our strategically important hotels and packages business grew year-on-year by nearly 70% in transaction and by 54.6% in net revenues. This strong performance resulted a full year transaction growth of over 50% in both transaction and constant currency net revenue terms.

For the full fiscal year 2014, the contribution from H&P rose to nearly 37% of total net revenues, an improvement from 31% contribution a year ago. This continued improvement in the mix away from air ticketing will help insulate our business from the volatility in the air market.

Let me now share the progress update on our domestic and international standalone hotels -- standalone hotels business. On domestic hotels business front, we continue to improve online content, enhance the experience on the booking front end, analyze and improve customer experience on the mobile platform, all of this help drive volumes within our domestic network of 11,400 hotels.

On the international hotels side, we further expanded our international hotels portfolio by our acquisitions of EasyToBook.com through which we now offer customers over 170,000 properties outside of India.

We believe our customers across our -- all our portfolio brands will benefit from the increasing choice in hotels, which they book with us, especially when it is for travel to and from Europe, India and Southeast Asia.

In our holiday packages business, we continue to see high growth during the quarter for domestic holiday travels than outbound holiday travels, which is in line with the seasonality trends in the holidays business.

Our packages business remains the last part of our H&P business and we continue to innovate to move holiday booking online and offer customer’s new desirable destination for leisure travel.

Now let’s move on to discuss our air ticketing business, where we continue to retain an industry leading domestic air market share of 12% at the end of our fiscal year. During Q4, air net revenue grew by 39.1% year-on-year as we improve the net margin yearly even though year-on-year transaction growth was a challenge due to persistence high domestic air fare environment.

However, special off-season low fare offered by domestic airlines during the quarter did help drive quarter-on-quarter transaction growth. During the last fiscal year, while the domestic air market growth was in the low signal digits, we continue to see good growth in the largely offline international air ticketing business. We have driven this growth by investing behind creating the superior online shopping experience.

For example, we now provide air tickets on travels visa requirements as our most strategic phase of the international flight booking funnel, we also launched an online cancellation tool for international air ticket to address a long standing customer need and believes we are the first Indian (indiscernible) to offer such a feature.

In summary, we are happy with our achievement for the fiscal year, we are stead fast in our mission to transform MakeMyTrip business toward greater share of hotel and holidays, and successfully delivered on this goal in fiscal 2014.

In fiscal 2015, we will be working relentlessly to leverage our mobile platform to drive the next phase of growth for the group and make more progress in changing our product mix in favor of hotel and holidays business.

Let me now hand the call over to Mohit to share our quarter results in detail.

Mohit Kabra

Thanks, Rajesh, and hello, everyone. In Q4 the MakeMyTrip team delivered net revenues of $28.5 million. Our net revenue for the full fiscal year was better than internal plans at $106.4 million representing a constant currency growth of 31.6%.

I will now elaborate on the financial performance across our key business segments. For the full fiscal year, net revenues on air ticketing business grew by over 21.1% year-on-year in constant currency terms and this was largely driven by an expansion of 60 basis points in the net margins from 6% in the last full fiscal year to 6.6% in the current reported fiscal year.

For the quarter, net revenues from the air ticketing business in Q4 grew by 39.1% year-on-year in constant currency terms. This growth was largely result of the air margin improving from 5.3% in Q4 last year to 6.4% in Q4 this year. However, this was a drop from the 10.3% air margins reported in Q3 of this fiscal year.

Now, I would like to present the financial highlights for -- of our hotels and packages business, which continues to be the business of strategic focus of the MakeMyTrip. Our revenues and service cost in the hotels and packages business stood at $20 million for the full year which represents 54.1% growth year-on-year in constant currency terms and the growth was largely driven by 53.1% growth in transactions. The transaction growth was fueled by nearly 70% in the standalone hotels business.

In Q4, our revenue by service cost from the H&P business built over $11 million which was also a 54.6% year-over-year growth in constant currency terms. Again, the growth was largely driven by year-on-year transaction growth of 69%.

Our net margins in the H&P business stood at 12.1% for the fourth quarter and at 12.6% for the full year, which is an improvement of 60 basis points over the last full fiscal year. The net revenues were about $1.4 million during the quarter. Our other businesses grew by 49.7% in the constant currency terms driven by the growth of travel insurance business.

For the full year, other businesses grew nearly 46% year-on-year in constant currency terms primarily due to the growth in the sale of travel insurance products for our customers. For this fiscal fourth quarter, we recorded an adjusted operating loss of about $1.3 million in line with our internal plans.

For this full fiscal year, we managed to run our existing operating loss of $3.5 million lower from the loss of $5.1 million reported in full fiscal year 2013. In March, we also successfully reached about $1.3 million in net proceeds in follow-on equity offering which further strengthened our already strong balance sheet to $143 million in net cash and cash equivalents.

We would continue to deliver a balance sheet and leading position within the domestic booking industry, during which we had strategic marketing and technology spend particularly in the mobile space.

Finally, as we enter the 2015 fiscal year, we are optimistic upon improving operating environment and new majority government that focuses on economic growth and the potential of additional capacity coming into the domestic air market at a later point in this year. Furthermore, a positive growth momentum in our hotels and packages business will help us build the strong foundation of a company, dominated by non-air businesses to guide sustainable high growth in the years to come.

On the air business, we will focus on retaining our key market share even as we remain wary of domestic air market near-term growth challenges and technically leverage future passenger growth to help drive accelerating growth in our hotels and packages business. With that said, we would like to begin our fiscal 2015 full year revenue less service costs guidance with $132 million to $136 million representing a constant currency growth of 24% to 28%.

We would now like to open the call for Q&A. Operator, please?

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from the line of Lloyd Wamsley from Deutsche Bank. Please proceed.

Kevin LaBuz - Deutsche Bank

Hi. Thank you. This is actually Kevin LaBuz on behalf of Lloyd Walmsley. My first question deals with the growth on the hotel side. Just wondering what drove the acceleration in bookings there. Was that stand-alone or packages? And do you think that the growth there is sustainable on the hotel side? And then I have a follow-up. Thank you.

Rajesh Magow

Thanks, Kevin. If I can take that, this is Rajesh here. In general, just like we mentioned in our call part of this -- small part of this actually growth also had coming from the acquisition that we made, but it's not a very significant part. And given their past strategic focus is hotel and packages, it's growth that part of the business and given the fact that we also have lot of headroom still in the domestic hotels.

Also there is a lot of focus on the international hotels, and outbound market from India is actually the fastest-growing market as well. So all of these factors are put together. We do anticipate that we will continue to have very local growth in the hotel and packages business.

Kevin LaBuz - Deutsche Bank

All right. Thank you. My follow-up is on the cost side. What drove the other expense line higher this quarter?

Mohit Kabra

Actually that -- it’s Mohit here. In terms of other expenses, this year -- this quarter also started consolidation of EasyToBook and we also -- saw some expense coming in, in terms of strategic marketing, particularly in the international hotels business.

Kevin LaBuz - Deutsche Bank

All right. Thank you.

Mohit Kabra

(Indiscernible) line with last quarter as well.

Kevin LaBuz - Deutsche Bank

All right. Thank you very much for that.

Operator

Your next question comes from the line of Manish Hemrajani from Oppenheimer. Please proceed.

Manish Hemrajani - Oppenheimer

Hi. Thanks for taking my call. Good quarter guys. Air was strong at the end of this quarter, better than what I and the Street had anticipated. How much of that strength do you pertain to the discounting we saw from airlines and India domestically? I think there were about five rounds in all of last quarter.

Rajesh Magow

Yeah. Manish, thanks for compliment. Yes, there was definitely some impact because of the [black] (ph) sales that we saw in this quarter. Just to give you a quick data point. So the Fed were on an overall basis for the quarter were down by about 5% year-on-year for this quarter. And that lead to a growth of about 16%, 15.8% to be precise quarter-on-quarter.

So that will give you some indication of the growth that happened because of the facts like four or five events that happened. In fact, if you put that in perspective, the overall full year [accommodation] (ph) growth including the price of fair increase that we saw year-on-year -- fair increase year-on-year for the full year despite its good quarter on fares was actually about 17%.

So fares were up 17% year-on-year on a full-year basis. And therefore, Manish, if you look at the overall air traffic growth on a full-year basis, you would see that exactly single digit growth which is in line with the overall market growth as well. It’s better than overall market growth given that from our market share perspective, we’ve been able to exit the same [versatile] (ph) markets share for the whole year as we exit the year as well.

So to answer your question, we did definitely see some impact of -- as we’ve been always saying that these shares are going to come down to the right price point. It does tend to stimulate the demand.

Manish Hemrajani - Oppenheimer

Got it. And then, longer term can you give us some more color on the air market for FY ‘15 especially in light of your solid (indiscernible)? How do you see the market playing out. What are the catalysts other than the launch of airlines, AirAsia and Singapore Airlines? And how do you see that impacting present day growth?

Rajesh Magow

Sure, Manish. Manish, I think these two factors like you said, rightfully pointed out the launch of these two airlines, the timing of the launch and also the kind of signs with which we -- what the airlines are going to come in. It’s going to be a very big factor, actually the year going forward.

If you’d move that for a minute, I think we will expect very, very little growth if at all. It’s really probably two airlines which are expanding as we’ve slowly -- Etihad-Jet Airways is still expanding rather slowly. Indigo is also slowly expanding. The other airlines as they are aware are not doing that well as of now.

So the situation definitely calls for the expansion in capacity, rationalization of airfares and thereby getting more stimulus for people who travel particularly leisure travel. So we think a couple of quarter down the line is when we’ll start seeing the impact. So the latter half of the year, we should see impact of increased capacity. The first two quarters, there will be some impact boiled up with common travel demand.

So we will get any (indiscernible) the natural, seasonal increase but again the next quarter will be seasonally low. And finally, we think on the latter part of the year will be increase in capacity.

Manish Hemrajani - Oppenheimer

Got it. And then you’ve been very active on the acquisition front with LTT to go, HotelTravel, and now ATB. As we close out fiscal 2014, can you talk about lessons learned there, integration timelines for recent acquisitions and will you continue to be in acquisitive mode in 2015, with the focus continuing to be on overseas?

Rajesh Magow

Sure, Manish. So I think it helps to definitely group some of these acquisitions, so we should look at three different buckets. I would look at LTT and ITC, both as fulfillment terms towards our outbound holidays business, both in Southeast Asia, one in Singapore, the other is largely in Thailand, which are both the most popular places for outbound holidays. This has definitely helped us in better fulfillment, in better customer experience and really given us more control over the customer into an experience on the holiday side.

So these integrations entity was completed actually some time back or this acquisition post IPO and ITC is also fully kind of integrated. I think these have been largely offline too. If we look at entry level we have again an investment really different from the acquisitions of minority investments here and it’s independently run, it’s run by the founder promoters of the company and it’s really a business, forward-looking business in the trip planning meta-search space. And that’s clearly in the investment development stage right now. A lot of interesting developments both have come out on the mobile side as well as on the website. And we are making good progress, but these businesses do take time and take in a lot of capital. There hasn’t been any integration, like I said, that is an independent business.

Coming to the most interesting of the (indiscernible) buckets, when we look at HotelTravel and now EasyToBook. So HotelTravel and EasyToBook are pure-play online hotel companies. HotelTravel based in Thailand with a footprint in Southeast Asia. Exceedingly important to us from a supply point of view of online hotels, it did take a while to integrate, I think it’s fair to say that it probably took us over the year to really fully integrate. We have now kind of cross-pollinated a lot of best practices. Key managers have been -- have actually been moved from MakeMyTrip India to HotelTravel and now we are beginning to see some of the benefits there of the move.

EasyToBook is very new. Just as we report, this really balanced at this year. So very early days. They have a really good team both in Amsterdam as well as some very, very good tech chops setting out of Tel Aviv in Israel. And actually we see a lot of cross-pollination opportunities out here particularly on front-end technologies as well as, as we actually now pool our resources and our inventory supply across the three brands. And we see an interesting network play.

So there is -- I would say EasyToBook is definitely work-in-progress from an integration point of view. And again definitely learn from HotelTravel will be -- it is going to take a little bit of time, but definitely I think more oversight and more exchange of personnel itself definitely helps in the integration. So, one of our senior members of the leadership team Keyur on the Board is actually spending a lot of time overseeing both those businesses and making sure that they are tightly integrated to the mother ship.

Manish Hemrajani - Oppenheimer

And then the second part of the question was should we expect you to be acquisitive in 2015 as well? Is there a pipeline you looked at for acquisitions?

Rajesh Magow

No, Manish, it’s a fair question. And especially in the light of recently concluded FPO, we definitely are on the look out and we are seeking interesting assets, both in India and overseas, which can help augment us either on the supply side, so better inventory on accommodation. As we all know that most of accommodation itself has revolutionized quite a bit, different kind of accommodations coming on onto the market and we are constantly looking unlocking a lot of non-conventional hotel accommodations which have come on, which opens up some opportunities. And there on the customer side too, we look at typically niche companies, smaller companies which have the ability or have already executing on the plan which would take us much longer to do on our own and where the inorganic move can actually us free to market.

So largely those are lenses through which we look at before getting into the financials of these companies. We’re also largely focused on the potential of the team. The current team we think is very important because that will still be over thought going forward. And I think that being said, yes, we are fairly busy on the look out, but the funnel there is pretty steep. So you have to see a lot of companies to really get some bond or maybe two companies which we think could really fit in the overall MakeMyTrip strategy.

Manish Hemrajani - Oppenheimer

One last one for me. I don't know if I missed that. What percent of transactions are now through mobile, and how does the conversion rate on mobile compare with desktop?

Mohit Kabra

Yes. So mobile overall is now giving us about 15% of transactions. In fact, air, on the air side, that’s 15%. What interesting is standalone hotels is actually up to about 27% and we think that is really encouraging for us going forward. And what we are finding is that different platforms of course have different immersion rates. But also as we are able to meet the user experience in India and therefore this most recent release of native apps both on Android and now on iOS, we see incremental increases in conversion and then it does take a little more time to kind of iron out some of those creases there as we kind of understand the levers of the funnel even better.

But definitely it’s been steadily increasing quarter on quarter, actually month on month and we really believe that this is still very early days for mobile. Lot of the developments here as I mentioned in earlier part of the call is actually now mobile focused and actually mobile first, a lot of the development at MakeMyTrip.

Manish Hemrajani - Oppenheimer

Thank you. And all the best.

Mohit Kabra

Thank you.

Operator

(Operator Instructions) Your next question comes from the line of Hitesh Das from Barclays. Please proceed.

Hitesh Das - Barclays

Hi, thanks a lot and congratulations on a good quarter. A couple of things. So how much do you think fares -- air fares will decline due to the launch of Air Asia and Tata in FY ‘15 going ahead?

Rajesh Magow

So honestly, anybody's guess like I was saying earlier just responding to the earlier question, a kind of similar question. So if you see this year the fares went up on a full-year basis approximately about 20%, actually 17%, 18% odd percent. And if you just take away the effects of this quarter and the sales that were announced like four or five events like some of the airlines, then it was actually even more than 20%. So it's going to be a function of additional capacity coming in and additional capacity as we all know, it won't come in like all of it together. So it will be a gradual buildup.

And then slowly and gradually, then there is more capacity than there is going to be some fare rationalization for sure, because the focus is going to be more than on the -- just filling up with these chains. And so Air Asia is kind of has -- is just trying to highlight to share their own strategy publicly as well that they’re saying that they want to just bring the fares down to 30%, etcetera as well. But then there maybe some other revenues that they would be looking to actually make it up for in terms of ancillary, sales ancillary items for them as well. So we will have to wait and watch, honestly. But when all the capacity is in, let's say both the airlines have launched, which probably would be two quarters down the line, at that stage one could perhaps estimate at least about 15% fares going down, if not more.

Hitesh Das - Barclays

Okay. And have you intruded both launches in your outlook for FY ‘15.

Rajesh Magow

Yeah. As one time estimate at this point in time. So we have kind of baked in the fact that the material impact on both the airlines launch in terms of additional capacity coming in and getting rationalized and so on. And thereby, there will be some kind of stimulation in demand definitely and not for the full year. So at this point in time, our current estimate is maybe two quarters down the line there maybe some impact beginning to happen and that’s the kind of scenario that we baked in.

Hitesh Das - Barclays

Okay. And how we chose the impact of EasyToBook acquisition on net revenues in this quarter?

Rajesh Magow

So, like I mentioned earlier, one that we actually do not split in our results and disclose that our results as you know on consolidated basis. But it wasn’t just -- given the fact that it was just like two-month of the quarter that we acquired EasyToBook, so it was in the material number.

Hitesh Das - Barclays

Okay. Okay. And another question, so employee expenses have trended down a bit in the second half of the year. Any specific reason behind that or what’s the trend would be going ahead? Any color on that?

Rajesh Magow

Okay. So on the year-on-year basis, employee expenses have kind of largely remained flattish and we’ve been able to keep a tight leash on edge. The core businesses, despite the increase in the hotels and packages business, because packages is more offline.

But and going-forward, we do not anticipate any significant additions in terms of headcount. Of course, there would be some appraise, its due for the annual increments. But for the annual increment we don’t really expect any major changes in the employer, personnel costs.

Hitesh Das - Barclays

Okay. Okay. Thanks a lot. And one last question, if I may. So the growth in the H&P segment has been very good and so in the medium-term, how do you see the proportion changing in favor of the hotels and packages segment? So what -- where will it finally settle down to, any color on that?

Rajesh Magow

If you look at it just kind of from the orders in the script as well that we expect large part of the growth coming from hotels and packages. The hotels and packages business saw growth upwards of 50%, close to 50% last year. We believe we’ll continue to accelerate on this growth in the forth coming year and hopefully do higher growth than kind of we have achieved in these fiscal year already ended.

Hitesh Das - Barclays

Okay. Thanks a lot.

Operator

Your next question comes from the line of (Indiscernible) from QVT Financial. Please proceed.

Unidentified Analyst

Yes. Just a quick question on the hotel side, did you see a lot of unique customers getting in and booking hotels or are you seeing a larger percentage of bookings coming from repeat customers?

Rajesh Magow

No. We definitely have -- yeah. Hi. This is Rajesh here. We definitely see a lot of unique customer, a lot of new customers are coming in. Clearly the bitrate definitely continues to improve every quarter, every year. But we continue to have more and more new customers coming in and (indiscernible). In fact, in the mobile platform, what we noticed was above 25% to 30% actually of the total mobile bookings were coming in from the new customers, who had actually never booked with us before as well.

So our assumption is perhaps there are the first-time bookers and maybe they don’t even own a deskstop. So it’s very exciting that lot of the incremental demand that is coming out of incremental growth, that is coming in, is coming in actually from the smartphone devices.

Unidentified Analyst

So, I mean, its fair to say that your acquisition cost for those customers is probably low because they coming directly to your app?

Rajesh Magow

Yes indeed. Yes indeed. Although I would say that one has to also keep in mind that the overall mobile platform and booking mix is more like 60-40. 60% is actually mobile but -- it’s a moving number but its just kind of broad check. So on mobile side, you will have the same kind of cost of acquisition. On the app side, you’re absolutely right and below.

Unidentified Analyst

Right. And then lastly, on the breadth of hotel, I mean, you mentioned 11,700 hotels in India. Are you seeing the breadth of bookings across that platform increased or do you still seeing a lot chunk of your booking coming from maybe your top 3,000 or 4,000 hotels?

Deep Kalra

I’ll take that one. This is Deep. So we have noticed that there has been kind of a modest increase. There on we saw very high concentration in the top 3000 and then the next grade coming out at about 5000 hotels. And we had actually raced ahead to acquire about 10,000 hotels and then in terms of the inventory of 10,000 hotels. And then gone slow when we had actual feel that the concentration has to typically in about 5,000 hotels, that has been growing.

We’re definitely getting and seeing more into some of lesser popular hotels. Also that tends to happen in season. So in season you see because obviously the capacity of hotels in India is not quite enough. The popular hotels get sold out quickly and then you see it spill over into all of these hotels. But also overtime people discover these hotels online because otherwise there is no way to find 101 property in a popular hill station in India or on the beaches or something. And that is where we’re able to promote these in interesting ways on the site, specifically using filters.

Also we found some hotels being more active with us on special deals when it come to last minute kind of booking and there we found some of the newer hotels that were erstwhile not so popular or who don’t enjoy very high brand. Appeal on their own are able to really come forward and put across and attractive proposition. So now the growth, I would think would -- we would have a better spread than we had a year ago.

Unidentified Analyst

Thanks for the answers.

Operator

Ladies and gentlemen, this concludes the question-and-answer session. And this concludes the call for today. Thank you for your participation.

Rajesh Magow

Thank you very much.

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