Rajesh Magow, Co-founder & Group CEO MakeMyTrip on Dealing With Crisis And Future Of Travel Industry

TL;DR

Rajesh Magow, the CEO and co-founder of MakeMyTrip, shares his experiences navigating various crises in the travel industry and provides insights on surviving and recovering in times of crisis.

Transcript

so when you have no revenue all what you have to do is to just fall back on your balance sheet and the watches that you typically have certainly that watches which was in a business as usual case which was looking healthy suddenly when there is no revenue it starts to look pretty small because your fixed costs are very very high welcome to prime ve... Read More

Key Insights

• 🥡 Crisis management involves staying calm, not panicking, and taking control of the situation.
• 😘 The size of a company impacts its ability to navigate a crisis, with smaller companies having the advantage of lower fixed costs.
• 🗺️ A shift towards domestic tourism and essential travel is expected, with international travel taking longer to recover.
• 🤪 The availability of capital and the flexibility to focus on growth are reasons companies choose to remain private instead of going public.
• 🍭 Fiscal discipline and corporate governance are essential, particularly in the path towards an IPO or a listing.
• 🗺️ Startups can find opportunities in rebuilding and reimagining the travel industry during the crisis.

Questions & Answers

Q: How does the size of a company impact its ability to navigate a crisis?

Magow explains that smaller companies have lower fixed costs, making it easier to optimize expenses and survive during a crisis. Large, public companies face more complexity and scrutiny, putting them at a disadvantage in crisis situations.

Q: Why do successful companies like Flipkart choose to remain private instead of going public?

According to Magow, companies often opt to stay private due to the availability of capital in the private market. It allows them to continuously focus on growth without the added scrutiny and pressure that comes with being a public company. However, most companies will eventually need to consider the path to profitability and potential IPOs for exit options.

Q: How will the travel industry recover from the COVID-19 crisis?

Magow predicts a slow and gradual recovery for the travel industry, with a shift towards domestic tourism. International travel is likely to take longer to bounce back, and the presence of a vaccine or cure could significantly impact the speed of recovery.

Q: What opportunities exist for startups in the travel industry during the crisis?

Magow encourages entrepreneurs to evaluate the space and not shy away from starting up in the travel industry. The crisis presents opportunities for new business models and innovation, especially in addressing the new normal of travel. Long-term thinking and identifying niches can lead to successful startups.

Summary & Key Takeaways

• Rajesh Magow reflects on the cyclical nature of the travel industry and the many crises MakeMyTrip has faced over its two-decade history.

• He emphasizes the importance of not panicking during a crisis and instead taking a step back to think through the situation and find solutions.

• Magow suggests dividing the crisis into two tracks - survival and recovery - and focusing on strategies for both.