12. How MakeMyTrip and Other OTAs Make Money (Despite Rare Use)
Question: "If the odds are so low, how do MMT and the other sites make money? Their customers also use them only 1–3 times a year."
Short answer: yes, individual users are rare. OTAs make money anyway because they own the booking, operate at huge scale, and have a brand people open directly. They also sell many categories and earn ads and extras on top. It took them about 20 years and billions of dollars to get there. A new planner app has none of these on day one, and that's what the low odds reflect. It doesn't mean travel can't make money.
All figures below are approximate and unverified. See research/10.
12.1 The six reasons
| # | Reason | What it means in practice | Can a new planner app copy it? |
|---|---|---|---|
| 1 | They own the transaction | MMT keeps roughly 8–12% of booking value as revenue: hotel commissions (~12–20%), package markups, and flight convenience fees. | No. A planner earns an affiliate share, roughly a quarter to a third of the OTA's cut. |
| 2 | Scale | Each user is rare, but tens of millions of users means bookings happen every minute. MMT processes roughly $9–10B of gross bookings a year (verify). | Not for years. |
| 3 | Brand and direct traffic | People open MMT, Booking or Airbnb directly when they need to travel, so the OTA doesn't pay to win them back each time. | No. A new app pays to reacquire the user for every trip. |
| 4 | Many categories, including business travel | Flights, trains, buses (redBus is owned by MMT), cabs, hotels, holidays, visas, forex, insurance, and corporate travel (myBiz). Heavy users book 10–20 times a year, not 1–3. | Not without inventory and supply contracts in every category. |
| 5 | Ads and extras | Hotels pay for sponsored placement. Insurance, forex, loyalty programmes and co-branded credit cards add revenue. | Partly: eSIM, insurance and activity affiliates are open to anyone, at a small scale. |
| 6 | Time and capital | MMT was founded in 2000, listed in 2010, was loss-making for most of its history, and has only recently been consistently profitable (verify). Booking Holdings spends more than $6B a year on marketing (verify). | No. This is exactly what a bootstrapped startup can't do in 24 months. |
The underlying rule: in travel, whoever takes the booking takes most of the money. A planner that sends users elsewhere for the booking does the hardest work (winning trust and building the plan) and keeps the smallest share.
12.2 Per-trip comparison
| Model | Example | Revenue to you | Does rare use hurt? |
|---|---|---|---|
| OTA (MMT, Booking) | ₹50,000 trip | ~₹4,000–6,000 (8–12%) | Less. Scale and the brand cover it. |
| Affiliate planner app (the original idea) | ₹50,000 trip booked through your link | ~₹1,200–2,000 (a share of the OTA's commission), if the user books through you | Badly. You must reacquire the user every trip for about ₹1,500. |
| Niche online travel agency (sell packages yourself: Pickyourtrail or Thrillophilia model) | ₹1.5–3 lakh international package for an Indian family | ~₹15,000–40,000 (10–15% margin) | No. Each customer is worth enough that one trip a year is fine. |
| SaaS for agents (TripDesk recommendation) | Agency on ₹1,999–9,999 a month | ₹24,000–1.2 lakh a year per agency | No. The agency uses it daily, whatever the traveller's frequency. |
12.3 The consumer path that can work: a niche online travel agency
If you want to serve travellers directly, don't build a planner. Become a specialist agency that designs and sells trips for one segment. Examples: Indian families going to Europe or Japan, honeymoon packages, pilgrimage circuits, Jain or vegetarian-friendly tours, senior-citizen group tours.
What $20k a month takes:
- $20k ≈ ₹17–18 lakh net revenue (margin) a month, at about ₹88 per $1.
- At an average margin of about ₹20,000 per trip, that's about 85–90 trips a month, or about 3 a day.
- Many Indian agencies already operate at this level, so it's a proven model.
Odds of hitting it in 24 months: ~25–35% (judgment estimate), with a founder or partner who has travel-trade experience and supplier contacts.
Why it's still not the top recommendation:
| Trade-off | Detail |
|---|---|
| Services, not software | Revenue scales with trip designers and support staff. The margin is on the booking, not 80%+ software margin. |
| Operations | Supplier contracts (hotels, DMCs, transport), visa help, 24×7 in-trip support. |
| Liability | You're the seller of the package, and you carry responsibility when things go wrong. Stricter package-travel rules apply if you sell into the UK or EU. |
| Tax and compliance | GST on tour packages, TCS on overseas packages (the traveller pays it upfront, which hurts conversion; verify current thresholds), and IATA or a consolidator for flights. |
| Cash flow | Advance payments to suppliers, refunds, cancellations, and seasonal peaks. |
| Competition | Pickyourtrail, Thrillophilia, Thomas Cook, SOTC, Veena World, and thousands of local agents. You win on niche focus and trust, not on price. |
AI still helps here. Use TripDesk-style tooling internally to design itineraries in minutes. That lets a small team handle 3–5x more enquiries than a traditional agency. That's the agency's edge.
12.4 Summary: which path, which odds (Tier B: $20k/month in 24 months)
| Path | Odds | Why |
|---|---|---|
| Consumer planner app (original idea) | ~5% | You do the work, the OTA takes the money, and you pay to reacquire users every trip. |
| Niche online travel agency | ~25–35% | High value per trip makes rare use irrelevant, but it's an operations-heavy services business. |
| SaaS for travel agents (TripDesk) | ~40–45% | Daily use by a paying professional, with software margins. Still recommended. |
| Becoming the next MMT | <1% | Needs a decade and billions in capital. |