As the topic suggests, and may just request the presentation to come up. We look at India's evolving travel landscape, right? I heard everyone talking. Let's look at the big picture first and then see the short-term headwinds. Everyone is talking about that. But how do we look at it? How does Rajesh look at it? Besides that, I think you never get a chance to question your own boss. So when Rajesh and Mr. Berry suggested that I can do the chat with Rajesh, I thought it's a great opportunity to ask questions. So okay, perfect. So let's start. So Rajesh, as we start, let's talk about the big picture first and how you look at the next couple of years. While we do get impacted by the immediate challenges, we've seen some ups and downs in the first quarter. But do you believe or do we at MakeMyTrip believe that it is the golden decade which everyone is talking about? What I'll also do is there are some data points, Rajesh, which can help you out. So
No absolutely. Yeah, thanks. Thanks and yeah I think the most interesting part is you asking me all the tough questions. But jokes apart, I think the job Mr. Queswani has made it very easy and simple for me because you've set the tone. I think you almost had a unanimous yes on almost unanimous. I know Zubin was trying to be more pragmatic a little bit, a word of caution which is always great on the general optimism. Right. So let me just maybe add a little bit more meat to that. But why should be optimistic about it? Why? There has to be a reason about it. It can't be just intuition. It has to be backed by some serious macro data that we should all feel bullish about it, right? Or optimistic about it. So let's start with the first data point that I wanted to share. Some of you may have seen it before, some may not have seen it. Some of them I've tried to bring in some more fresh color to it as well. I think the biggest one that we should all keep in mind just from a macro standpoint like macroeconomy factor is the demographic dividend. Demographic dividend is nothing but the working population. What does working population do? Working population drives the economy from a consumption standpoint and that's going to be huge. The most important part here is as we keep listening to and we've been, and it's been a while right that we've been listening that India has been doing better than the rest of the world. One single biggest reasons for that is this dividend that we have because if you see that left hand side chart and see various other countries everywhere, it is everywhere seems to be every country seems to be losing their dividend very very fast now which is becoming India's advantage. The other way of putting that is India is evolving, as JB was trying to say in the earlier panel, we were a developing, we were an underdeveloped economy getting to a developing economy or emerging economy whatever way you want to give it to, it's basically stages of evolution of the economy only, but this is the one that is going to drive. And you would see Bangladesh by the way just behind us in terms of when will the demographic dividend is likely to end and then there is Brazil. China is another 5 years ago. China was a great story and I know China is a bad word but China was a great story three decades ago, two decades ago and increasingly now losing the demographic dividend. So no matter what happens, this is going to stay and all of this what I'm going to talk about at least in the first section by the way is going to be a really long-term outlook. It is not necessarily here and now and we'll talk about here and now which is the second part of the conversation, how do we see headwinds from a short-term perspective and how should we possibly deal with it. The other thing that you see along with that on the right hand side is also equally important and that is a direct function of overall GDP growth that is happening, that the incomes are rising, but we must understand how incomes are rising and how the consumer cohorts are going to behave. And for that this data point is very very important. And you may have heard that a lot of people talk about a per capita income benchmark as an inflection point and I just saw a video day before yesterday and WhatsApp, you have all kind of stuff that goes on, except for the number everything else was right. I think the number was being talked about per capita income of $3,000 is going to change the game, that I'm not sure is true, especially for our industry. But what is definitely going to change the game is going to be between $5,000 to $10,000 and more so more than $10,000 annual income. And that is a significant cohort and growing. This is 2019 data and projections for 2030. If you look at these numbers, these are sizable number of households, which effectively means on an average per household number, if you take four members, they're going to be multiplication of four consumers or the people who would be spending that household money. Today, this is 2019 data but if I take today's data, households between $5,000 to over $5,000 annual income is about 75 million households roughly or between 75 to 100 million households, which effectively means about 350 to 400 million people. That's going to grow to about 170 million households by 2030 and more than $10,000 annual income household is going to be about 75 million. Now that is where the discretionary spend led industries would grow. I don't think if there is anything, if the demographic dividend is going to play out, of course everything is going to be a function of executing it well. If we don't end up messing on the execution on all fronts of the economy including the reforms, this is going to stay and the incomes are going to rise. The growth rate is going to be 6%. In fact, I was reading one economist the other day, very famous, I quite like reading him, and he was saying the real issue is not about hitting the 6%. The real issue is if you want to ambitiously meet the 2047 goals defined by the country, then it has to be an 8% growth and for 8% growth you need next level of reforms across the board. If we don't end up doing reforms across the board, which is part of the execution, then we will suffer. Those are the kind of issues that could emerge but all of that is going to be more related to what are we going to do, how are we going to do more in the execution domain rather than macro factors. This chart that you see on the slide on the left hand side, you will see the discretionary income changing. People are just going to, out of the total income, if it is 80-20 today in favor of essentials, it's going to become 60-40. So 40% discretionary income of the total income. Imagine what can potentially happen. Now marry that with the next graph that is a 2025 survey globally. Travel turned out to be the number one item where the discretionary spend is getting spent today in 2025. This is not history. This tells you today's trend. So if you bring all of this together, these are all obviously positive signs on the demand side, which is very very important. Now this one is more an interesting trivia and this will just give you an indication of what's happening.
And maybe very relevant for this audience. The premium.
Yeah, yeah. Sure. Absolutely. These are private jet departures by the way. Huge growth happening on the private jet market under the radar. I don't think people are realizing this under the radar. China was a surprising number here but it has a different type of issues in the space because a lot of the airspace is owned or controlled by military there and therefore this industry has not really grown. I don't know if anybody can take a wild possible guess on the US private jet market in terms of just go wild in your imagination and say how many times more from this number. Some sorry.
It's a 105x of this number, right? So it's just crazy. Now US is an extreme example because it has massive number of airports, massive number of wealthy people if you will, and therefore private jets. But it only gives you the direction which India is sort of going towards. So I think we should keep that in mind. Now let's come to the supply side, just couple of data points on the supply side given that we are also talking about travel and tourism. The next one. Now look at now, and I know the previous panel was talking about a lot of noise in this industry and I think Ashish made a good point. Let me tell you, it is a phenomenon of every sector, every industry. So if you see the announcements which might be exaggerated today in the hospitality industry, maybe hospitality industry is just catching up with that. But if you look at aviation historically worldwide, you will see headlines all the time of record orders. All the time, there is no one year where you will not hear the announcement of world record orders if nothing more. Right? And it's a phenomenon and I think over the years all the serious players figure out their own way of analyzing the data with a pinch of salt and invariably you would realize across the sector, our sector was not any different. Given that MakeMyTrip has a 25 year journey and I had the opportunity to get connected with a lot of other non-travel e-commerce companies as well for the last 25 years, there has been tremendous amount of noise, tremendous amount of capital flown into the sector. People talking about building long-term sustainable businesses forever. They thought that the venture capitalist thought that the exit could be maybe 5 years, within 5 years we will make a ton of money, they're still making some 15 years or 20 years. So invariably what happens is it boils down to timing. Not that it won't happen, it will 100% happen given that the macro drivers are there. It might not be 2030 projection, it might be 2035 projections on actual execution, it might just get delayed, but it will 100% happen and I think that's the only difference that plays out invariably in every industry. So you look at the orders, we take it with a pinch of salt. All orders put together on aviation front for example, which is the lead indicator in our industry always. In 2024, if it was 700 odd fleet size, it's going to be 2x fleet size by 2030. If you look at number of airports, crazy numbers. In 20 years again we will be phenomenally growing. And the next one is even more interesting and some of you in the audience may relate with that better in the hospitality sector. Just go to the next slide please. And this I found very fascinating and this is an analogy of US brand Marriott and then Europe and then India. Very interesting correlation in GDP growth and then the brand growing along with it. These are actual numbers because that's history as far as US and Europe is concerned. You will see it is either 9 years or 8 years and India's case we are talking about 7 years and maybe in India's case it may not be 7 years, it might be 10 years or 12 years, doesn't really matter. The GDP was growing 2x and phenomenal growth in the brand size. See the numbers are in front of you for Marriott as well as IHG. And at least our belief is that it is going to happen exactly the same way in India. Therefore if I look at some of the publicly declared numbers, let's say IHCL for example.
Yeah, currently how many hotels do they have?
So the projection is from now at about 170 or so to about 700.
Including Gingers to about 700?
