Easy Trip Planners Ltd (NSE:EASEMYTRIP) Q3 FY23 Earnings Concall dated Feb. 06, 2023.
Corporate Participants:
Prashant Pitti — Co-Founder and Executive Director
Ashish Bansal — Chief Financial Officer
Analysts:
Unidentified Participant — — Analyst
Swapnil Potdukhe — JM Financial Ltd. — Analyst
Madhuchanda Dey — Mc Pro — Analyst
Aditya Chandrasekar — UBS — Analyst
Gautham Kotagiri — Retail Investor — Analyst
Saket Kapoor — Kapoor & Co. — Analyst
Presentation:
Operator
Good evening, ladies and gentlemen, welcome to the Q3 FY 2023 Earnings Conference Call of EaseMyTrip. Today in this call we have Mr. Prashant Pitti, Co-Founder and Executive Director; Mr Nishant Pitti, Co-Founder and CEO; Mr. Ashish Bansal, Chief Financial Officer; Mr. Basai [Phonetic] Shetty, Head of Investor Relations and Mr. Rajat Gupta from the Investor Relations. The results for the Q3 FY 2023 for the company, the investor presentations and the press release have been uploaded on the stock exchange and on the company website.
Before we start the call, a disclaimer, this conference call may contain forward-looking statements about the company which are based on the beliefs, opinions and expectations of the company as on-date of this call. These statements are not guarantees of future performance and involve risk and uncertainties that are difficult to predict. [Operator Instructions]
I now hand the conference over to Mr. Prashant Pitti, Co-Founder of EaseMyTrip. Thank you and over to you sir. Mr. Prashant…
Prashant Pitti — Co-Founder and Executive Director
You have to unmute everyone.
Operator
Sir, I have unmuted everyone, you can go ahead, sir.
Prashant Pitti — Co-Founder and Executive Director
Okay. I hope I’m audible now?
Operator
Yes sir, please go ahead.
Prashant Pitti — Co-Founder and Executive Director
Thank you. Good evening, everyone. In the previous quarter three of fiscal 2023, we delivered yet another solid performance, driven by our customer first strategy, long-term investment in people and technology and by focusing on our growth priorities for FY 2023 and beyond. During the quarter, we put record gross booking revenue of INR270 crores, an increase of 76% year-on year and nine monthly gross booking revenues of INR5,911 crore,.a 132% increase year-on year. We have already surpassed our full-year FY 2022 gross booking revenue by 59% another up to setting up a new level for the current fiscal. In doing so, we apply the same discipline approach to efficiency that has produced consistent and predictable earning for us in the past.
During the quarter, we saw increased volume in our air travel and hotel segment, which benefited from our superiority of brand, our investments toward marketing and promotions in the last quarter and the festive seasons in India, which is regarded as one of the busiest travel period in the world. Our core segment which is air travel booking grew by 31% in quarter three of FY 2023 year-on year, whereas hotel segment grew by 88% year-on-year. We have heavily benefited from being a customer first company, building on our core customer centric approach, we concluded our travel festival fees exceeding INR555 crores between October 6 and 23rd.
The success of festival season demonstrates the appease of our value proposition to our customer. Recently, the company introduced a robust rental program reward system EMT Pro, that aims to reward loyal customers when they refer now and they can earn forever. In order to further accelerate the adoption of B2B offering, which is business to enterprise offering, our company launched 2.0 third book tool for the corporate. The tool uses AI machine-learning and data mining technologies to become more efficient and resourceful.
In the journey of creating our customer experiences, we have also built several trusting respectful and complementary partnerships. During the quarter, the company collaborated with MobiKwik Zip, India’s leading Buy Now Pay Later platform to enable users to book their travel today and pay later date, all this while gaining attractive discounts. Your company has also signed a GSA with GO FIRST to exclusively sell, promote and market passenger tickets to passengers in Saudi Arabia.
Over the past month, we have also become official travel partner for the first world tennis league held in Dubai and the official travel partner for IIFA Awards 2023 to be held in Abu Dhabi. We are very optimistic about future levers of growth both inorganic and organic. We continue to execute our previously announced portfolio expansion strategy. During the quarter and acquired Gujarat GIFT city-based Nutana Airway. Nutana Aviation leases charter aircraft enabling operators to run efficiently, along with providing air charter booking services to the client. The acquisition will add new revenue stream to the company’s well-diversified business model and will help developing EaseMyTrip into comprehensive travel ecosystem.
In order to further strengthen our hotel booking portfolio, we recently acquired a majority stake in check-in, which is first-of-its-kind real time market place for hotel booking, which allows travelers to bargain directly with the hotelier over the prices of the room. These acquisitions, we are prudently investing in our capability for the future growth and return. Building on sustained growth, the industry has witnessed during FY 2023 with domestic travel almost touching the pre pandemic numbers. The budget announced last week reiterated the government’s continued focus on developing tourism in India. The revival of 50 additional airports, helipads, water aerodrome and other advanced landing lounge would more certainly help in improving regional air connectivity, developing 50 cities across India as a complete pack for tourism good growth will [Foreign Speech] initiative which is aimed to promote domestic tourism amongst the use of the country. The government’s push to set up Unity Mall in the popular tourism destinations in all states would enable the state to promote their rich culture and history, which also is promoting Make in India product. We strongly believe all the government effort to promote tourism in the country, backed by the proposed increase in capital investments in infrastructure would be key in driving long-term growth for all the stakeholders in the industry.
Now moving to the financial performance highlight. As highlighted earlier, the gross booking revenue, the GBR for quarter three stood at record INR2,270 crores as against INR1,290 crores in the corresponding quarter, representing industry growth of 76% year-on-year. The growth is the testament to our unique business model and solid industry positioning. The robust growth resulted in strong seasonal push, vigorous festival spending and backed by magnitude of marketing strategies deployed across each segment. The GBR for nine month stood at INR5,911 crores as against INR2,544 crores in the corresponding period, a growth of 132% year-on-year.
The adjusted revenue for this quarter stood at INR196 crores, growing 29% year-on-year and the nine months adjusted revenue was at INR496 crores, growing at 65% year-on-year. The revenue from operation for quarter three stood at INR126 crores as against INR86.6 crores in the corresponding quarter, again registering a sharp growth of 46%. The manpower cost as a percentage of GBR has slightly increased 2.6% of GBR as compared to 0.5% of GBR as we continue to invest in our workforce.
Marketing and sales promotion as a percentage of GBR were at 0.9%, which is slightly down as compared to 1% of the previous fiscal. EBITDA for the quarter stood at INR58.9 crores. For nine months of FY 2023, the EBITDA stood at INR144 crores and increasing 28% as compared to INR112 crores in the corresponding quarter.
EBITDA margin for quarter three FY 2023 was at 45.4% and for nine months was at 43.4%. We have consistently delivered profit since inception, this quarter was no exception. During the quarter, profit-after-tax was at INR41.6 crores. The PAT for nine months stood at INR103 crores as compared INR6 crores in the corresponding period, making a growth of 25% year-on-year. The PAT margin for quarter three stood at 32.1% and for nine months at 30.9%. In terms of volume, this quarter we sold 32 lakh air tickets, net of cancellations, 96,000 hotel night and 1.74 lakhs tickets in the other segment, which primarily consist of bus and railways.
During the quarter, 84% of total volumes was sold in our B2C segment, 14% in B2B2C segment and remaining in our B2B segments. Our endeavor to grow globally is also taking interpretation, as we are able to grow our Middle-East GBR from INR8 crores in quarter one of 2023 to INR24 crores in quarter two of FY 2023 and in the last quarter it stood at INR44.4 crore. Now I request moderator to open the line for the question.
Questions and Answers:
Operator
Thank you very much. [Operator Instructions] Our first question is from HS, AUM. Please go ahead.
Unidentified Participant — — Analyst
Hello?
Prashant Pitti — Co-Founder and Executive Director
Yes, please go ahead.
Unidentified Participant — — Analyst
Sir, firstly and this question on employee expenses. Our expenses on quarter-on-quarter basis have increased by around 17% to 18% and Y-o-Y it has more than doubled. So, what might be the reason for it?
Prashant Pitti — Co-Founder and Executive Director
One of the biggest reasons is that we have also acquired companies and in consolidated view their numbers have also added up. But otherwise, of course, there is an increment and push towards increasing the headcount as we are growing globally.
Unidentified Participant — — Analyst
So going ahead, should we assume that INR14.5 crore should be constant number now with no new acquisitions?
Prashant Pitti — Co-Founder and Executive Director
Well, I would not be able to say that, of course, there is an appraisal process as well which happen on regular basis, but otherwise we should say that there was one-time big shift because of the new acquisitions, Spree Hospitality, entire staff also got added into our numbers. But otherwise, there should be a reasonable growth, not the kind of numbers that as Y-o-Y you said the the numbers are doubled, that is not what should be expected from henceforth.
Unidentified Participant — — Analyst
Okay. So can you just breakup so how much would it be the revenues which has due to acquisition in organic terms and how much did we grow organically? And the breakup of expenses also in the same way if possible?
Prashant Pitti — Co-Founder and Executive Director
Ashish ji?
Ashish Bansal — Chief Financial Officer
Hello? Yes, sir, [Indecipherable] majority of the revenue are coming from the E&T India and from the subsidies there is no volume, but they are growing quarter-on-quarter basis.
Unidentified Participant — — Analyst
Sir, your voice is a bit muffled, if you can come closer to the speaker phone if possible.
Ashish Bansal — Chief Financial Officer
[Speech Overlap] you are asking about our subsidy number?
Unidentified Participant — — Analyst
Sir, I just want a breakup of how much would be the organic revenue numbers and employee cost wise?
Ashish Bansal — Chief Financial Officer
More than 95% if you say the number is organic and less than 5% are inorganic, this is to oversee the subsidy and the execution. So you can say the majority number is coming from standalone financial only.
Unidentified Participant — — Analyst
Okay. Sir, my second question was on other expenses, so as other expenses has nearly tripled in the — on a Y-o-Y basis from 7 to around INR21 odd crores, so can you just help us understand the breakup of expenses how much would be due to commissions and how much would be corporate or admin expenses in nature?
Ashish Bansal — Chief Financial Officer
So most of the other expenses increase has happened because of the commissions which are going to B2B2C segment. The office expenditures base in that much of a shift, except that the B2B2C is growing as we have mentioned that right now 84% of business is B2C, 14% is B2B2C and commissions are going on those B2B2C business and that is why the other expenses have gone up.
Unidentified Participant — — Analyst
So, should we understand other expenses to remain stable as a percentage of revenues itself at 0.8%, 0.9% over that?
Ashish Bansal — Chief Financial Officer
That would not be correct because the admin expenditures would not change as much, but yes as B2B2C business grows, that percentage will probably remain the same. So hence you can assume that overall on the percentage basis it might go slightly lower, but again there is a component which goes up as the business grows in the other expense.
Unidentified Participant — — Analyst
Okay, thank you.
Operator
Thank you. Our next question is from the line of Swapnil Potdukhe with JM FL. Please go ahead sir.
Swapnil Potdukhe — JM Financial Ltd. — Analyst
Hi, Prashant. Thanks for the opportunity. So just wanted to check on the current competitive intensity, how is that playing out. During the recent quarter, we seem to have held up our market share. But at the same time, we are not — we have, our discounts have also come down and A&P spends are also down. So just wanted to understand like how how are you looking at this space right now, are you — do you intend to hold onto the market share or do you, are you aggressively looking to increase your market share?
Prashant Pitti — Co-Founder and Executive Director
In the last couple of quarters, you should see that we have gained market share in air travel. You should be able to compare it with the other players and you should be able to see that the air segment, our market share has only increased, while we have reduced our discounts dramatically, that is why this company is going profitability.
Swapnil Potdukhe — JM Financial Ltd. — Analyst
What is exactly playing out there, if you can elaborate a bit more?
Prashant Pitti — Co-Founder and Executive Director
Sorry, what is…
Swapnil Potdukhe — JM Financial Ltd. — Analyst
What is helping you gain market share while you’re reducing your discounts, so what about the factor…
Prashant Pitti — Co-Founder and Executive Director
The first and foremost is our brand acceptability after being with — we have lakhs of people who are our shareholders right now. We have also opened up — we have also started one promotion scheme for our shareholders to thank them back for putting first EaseMyTrip which is E&T family in which they basically get subsidized rate compared to the other people. By the virtue of being the only OTI which is listed in India, surely the brand validation and acceptability has increased and also we have put in decent amount of effort in building brand by partnering various events and various cricket matches and which is also helping the company to grow faster.
Swapnil Potdukhe — JM Financial Ltd. — Analyst
Understood. And my second question is we have with respect to your accretion. So can you just help us understand the business models of this the newly-acquired companies Nutana and Check-in? A bit more in detail would help. Thanks.
Prashant Pitti — Co-Founder and Executive Director
See, Nutana is a recent company where have taken 75% stake in the company for the consideration of INR1.5 crores, which is primarily, which is a primary capital. So there is no secondary purchase, we have increased 1.5 crores in the company’s. We have taken 75% stake in the company. The business model of Nutana is fairly straightforward, it basically eases out the air charges to various, corporates, individuals and various OTA, it could even lead out to various OTA. At EaseMyTrip, we look forward to grow the air charter business which is highly fragmented right now between $2 billion to $3 billion at the moment and it’s highly fragmented. And using Nutana’s capability we would want to grow our organization for non-scheduled air traffic as well. Right now majority of our business is scheduled air travel, we would want to grow our non-scheduled air travel.
And if you want I can talk a little bit about Check-in as well, the second acquisition.
Swapnil Potdukhe — JM Financial Ltd. — Analyst
Yeah, just before we go to Check-in, just wanted to understand, will the non scheduled listings be available on your platform going ahead or it would be completely different platform?
Prashant Pitti — Co-Founder and Executive Director
No, no, it will be less in fact, you can even see it right now, air charters option is available on-budget. Of course, a lot of work needs to be done on that and we are working on it as we speak, but this would also become — see we already have a very good amount of demand between 10 lakh to 12 lakh people visit our website on daily basis. Now many of them non scheduled air charter might actually make a lot of sense. Right now when people travel via air charter, they have to actually pay for both ways. At EaseMyTrip, we can democratize it by actually fragmenting it where you can just buy the seat and also just for the one way rather than you have to buy for both ways air.
So a very solid demand exist at EaseMyTrip platform, we want to capture the market of another $2 billion to $3 billion which exist for non-scheduled aircraft and that is why that was the rationale behind Nutana in acquiring 75% of the stake at INR1.5 crores for the contribution of INR1.5 crores which was issued timely.
Swapnil Potdukhe — JM Financial Ltd. — Analyst
Right. And a few words on Check-in please?
Prashant Pitti — Co-Founder and Executive Director
Sorry?
Swapnil Potdukhe — JM Financial Ltd. — Analyst
Check-in acquisition also?
Prashant Pitti — Co-Founder and Executive Director
Check-in, Check-in, of course, see Check-in again is first of one of its kind business model, we see a very, very — we see a tremendous scope in fleet what Check-in can do. We have acquired 55% stake of Check-in in consideration of INR3 crores, which was again also primary investment in the company. It’s a newly formed company, what it does is it allows travelers to negotiate directly with the hotelier and we really believe that this technology could be of tremendous use specifically for the last-minute booking, when a hotel is occupied at 80% to 90% and if they can get additional last minute booking at substantial price substantially lower price as well, they might still also be willing to take that provided the rates are not public and that is what Check-in does, it allows people to quote the price and hoteliers to accept the price, hence their published price actually does not change and because of which it might be a win-win for everybody for the last-minute booking.
Check-in also has provided their platform to hoteliers, not just the app and majority of the hoteliers prefer the web platform and we have — we had about 60,000 hoteliers who have actually created the login on Check-in and customers can basically bargain for those hotels with the hoteliers.
Swapnil Potdukhe — JM Financial Ltd. — Analyst
And what would be the volumes right now that you’re doing over here?
Prashant Pitti — Co-Founder and Executive Director
The volumes have just begin, both of these companies are newly formed companies, we have acquired these companies not on the basis of their past record, but on the basis of what the future could look like and that is why the acquisition amounts are also significantly lower.
Swapnil Potdukhe — JM Financial Ltd. — Analyst
Got it. Thanks a lot for taking the question. Thank you.
Operator
Thank you. Our next question is from the line of James Varghese with Tawasia [Phonetic] Capital, please go ahead.
Unidentified Participant — — Analyst
Yeah, hi, Prashant. See, two new lines have been added in the expenses side, service cost and cost of material, can you please elaborate on that?
Prashant Pitti — Co-Founder and Executive Director
So service cost is basically the cost which is related to group movement. We have recently started doing group movement, might movement in which we give the entire package to a corporate and then the entire servicing is done by us. So, yes, there is a revenue as well which comes along with that, but there is also a service and that is a service cost, that is one-line item which comes along with the group booking in the might booking. Which was the other line-item you mentioned?
Unidentified Participant — — Analyst
Cost of material consumed?
Prashant Pitti — Co-Founder and Executive Director
[Speech Overlap].
Unidentified Participant — — Analyst
Yeah, just a second, this service cost will also include the incentives that you are getting from the group airlines?
Prashant Pitti — Co-Founder and Executive Director
That comes in revenue, it’s the cost which happens to be…
Unidentified Participant — — Analyst
Yeah, that comes in revenue, okay, okay.
Prashant Pitti — Co-Founder and Executive Director
Yeah, yeah, right. Thank you.
Unidentified Participant — — Analyst
Yeah and then one more question with regards to EBITDA margin, do I expect this to settle around 40% or it can go further down from here?
Prashant Pitti — Co-Founder and Executive Director
See, since last three quarters, our EBITDA percentage has only gone slightly up. It started with about 40%, now I think it is about 45%. I believe that as an Internet company we are, overall the EBITDA margin should only go up. And if you see — if you just not the last year was an exceptional year, but if you start seeing from 2017 onwards, I believe that our EBITDA margin went up from 7% to right now at 45% and that is how it should be, for an Internet company, the EBITDA margin should continue to go up because the revenue can increase exponentially, but the cost — cost can only — cost should only go up loss making and that is why Internet companies are valued so much.
Unidentified Participant — — Analyst
There is only increment from as you have said.
Prashant Pitti — Co-Founder and Executive Director
Sorry?
Unidentified Participant — — Analyst
So it will incrementally grow from here as you see?
Prashant Pitti — Co-Founder and Executive Director
That is what we expect, as you know, our marketing expenditures, our employee expenditure should not go in the direct way, it should not grow in the direct proportion to our GBR. It would be a slow and steady increase, but we are looking-forward to keep bettering our EBITDA margin.
Unidentified Participant — — Analyst
Okay, thank you. Thank you.
Operator
Thank you. Our next question is from the line of Madhuchanda Dey with Mc Pro. Please go ahead.
Madhuchanda Dey — Mc Pro — Analyst
Hi, am I audible?
Prashant Pitti — Co-Founder and Executive Director
Yes, Madhu.
Madhuchanda Dey — Mc Pro — Analyst
Yeah, hi, good evening. So I have three questions. So far we have seen smaller acquisition from yours, that has actually so far I know it will take time, not move the needle away from our dependence on the air ticket segment. So, I mean, what is holding us back, is it lack of availability of the right candidate, is it the pricing or is it our management backing with in expanding into other segments, I mean, what is basically holding us back from doing something which is your…
Prashant Pitti — Co-Founder and Executive Director
So, Madhu, I would actually like to reiterate the fact that at the time of listing, at the time PO, 97% of our business was basically flight business and 3% was everything else which is bus, train, hotels, holiday. Now that number is somewhere around 89% and 11%, 89% is flight and 11% is everything else put together. So that clearly demonstrates that the number is changing. And also for the matter of fact, that as our flight business is doubling almost doubling, this becomes even — this change becomes even more harder as for all the others you have to actually quadruple to be able to get the lower here.
So I would like to — I would like to reiterate the fact that the company is able to grow our non-air business organically. Also another thing is that we also come with a thought process that we don’t want to grow at every cost, we want to grow profitably. So each of our line-item be it bus, be it train, be it hotel, are either breaking even or are making money for the company. We do not want to burn today to earn tomorrow, that is not the kind of mindset which we have. On the terms of acquisition, of course, the company is very cautious and wants to utilize money very judiciously and that is why we are taking very calculated approach in what we acquire and what we don’t.
So far, our two acquisitions have done fairly well, Spree Hospitality is profit-making, is already profitable and at the time of acquisition it had about 12 hotels and now it has about 28 hotels in its portfolio and many more lining up, they keep adding five new hotels every quarter for Spree and we look forward to grow that Company profitably. UNO [Phonetic] has also started doing pretty well, the business has started coming, last quarter there was a loss on UNO, but we are catching up on the profits and the business is also growing pretty rapidly.
For these two new acquisitions as we said that these two are basically newly formed company and especially because we want to focus more on the companies which can actually be disruptive in nature and since we let’s say we were not able to find any receptor company, we thought that okay, these companies which exist but have very minimal business, we should back them because overall psychology seem pretty robust to us. So and it’s not that the company is not aggressive on the acquisition side and there is ample amount of management bandwidth as well, because there is an endeavor from our side to grow company inorganically as well in the non-air space. So we look forward to continue our growth on non air space and we fill it as and more acquisition happen.
Madhuchanda Dey — Mc Pro — Analyst
Yeah, thank you. Thanks for that long answer. My second question is slightly macro, see post the pandemic there was a big rush and that was expected because of this in a pandemic use — pandemic induced mentality and then people were trapping, but we see that kind of continuing and then Q3 has been a record quarter for airlines or hotels for everyone. So I mean what is changing structurally or is that something you see that with very, very different from what we had seen maybe three years back?
Prashant Pitti — Co-Founder and Executive Director
So I see two macro level big transformations, one is the way how customer things and see, which is I really do not think that there is any revenge travel is just that new way of how people live and then I guess thought as it’s best to live with the moment and travel constitute as one big portion to live in the moment. So I believe that the expenditures on travel will only continue to go up as the country’s GDP, economy continues to do better and people enjoy to live their life.
But the other big reason why we believe we are very, very bullish on Indian travel ecosystem is that there is no other country in the world which can say that there are 66 new airports, which are going to come in the next decade, except for India. In India, the infrastructure development is at record pace. Most of the countries are not developing new airport, except for India. So we really believe that as per multiple projected report, the entire air segment, domestic air segment in the next 10 years might go up by three times. And hence the OTA which have become a necessity in travel will only continue to grow. See, gone are the days when we were on laptop and we could have opened ten different airline website, 100 different hotel website to check the prices, now everybody is booking on mobile and on mobile it becomes extremely cumbersome to open up various website and hence the OTA has become part and parcel of the travel industry and we look forward to continue grow as the Indian macro continues to grow and satisfy.
Madhuchanda Dey — Mc Pro — Analyst
Sir, do you want to call out any your expectation about the kind of GBR growth that you expect in the coming two to three years?
Prashant Pitti — Co-Founder and Executive Director
I would say that we are aiming to become a INR500 crore profit company in the next three to four years given our international and — given our growth in India, we are looking forward to become a INR500 crore profit company in the next three, four years.
Madhuchanda Dey — Mc Pro — Analyst
Thanks, thanks a lot and all the best.
Operator
Thank you very much. [Operator Instructions] Our next question is from the line of Aditya Chandrasekar with UBS. Please go ahead.
Aditya Chandrasekar — UBS — Analyst
Yeah, hi. Just a quick question from my side. So is it possible to kind of give the gross booking revenue breakup between the different segments in terms of air, hotel, bus, train etc? That’s first one.
Prashant Pitti — Co-Founder and Executive Director
We will start indicating it from next quarter onwards, this quarter we have not indicated it.
Aditya Chandrasekar — UBS — Analyst
Okay, sure, sure, but I got your percentage, you said 89% is air right currently?
Prashant Pitti — Co-Founder and Executive Director
The overall 89%, 90% is something which is air and remaining non-air, that is correct.
Aditya Chandrasekar — UBS — Analyst
Got it, okay. And secondly, can you just, I mean, qualitatively, can you just talk a little bit about the hotel business on how you plan to scale it both as a percentage of your overall business, as well as how do you kind of reduce the gap between you and market leaders in terms of the gross booking from hotels. What’s the strategy for that segment to grow rapidly?
Prashant Pitti — Co-Founder and Executive Director
See, we operate our hotel business in a very unique way through our channel partnerships with aggregator, which enables us to provide the best room rates in the industry. Because of which our hotel business is already increasing on year-to-year basis. I’m assuming that you are aware of our aggregator model, which is a huge differentiator between us and the other. Now this model itself allows us to keep adding more and more aggregator, so that our prices keep going down, not because we are heavily discounting it, but because there are multiple properties who are contesting for our business by reducing their price for any particular hotel via the aggregator model.
So this model is helping us grow this business, given on making some money for the company, while other competitors who enjoy a substantial position in hotel industry are still loss making in their businesses. So this is a winning strategy which we have with us and we would like to continue build on top of it.
Aditya Chandrasekar — UBS — Analyst
Got it. And do you have some kind of long-term target in terms of as a percentage of your overall business what should air contribute and hotels and other segments contributing…
Prashant Pitti — Co-Founder and Executive Director
At the time of listing, we said that within next three to four years, we would want to be 70:30, which is 70% air segment and 30% non-air, I think we are getting very closer to that and we might reach that position even before what we committed.
Aditya Chandrasekar — UBS — Analyst
Got it. Okay. Thank you. That’s it from my side. Thanks.
Operator
Thank you. Our next question is from the line of Gautham Kotagiri, Retail Investor, please go ahead.
Gautham Kotagiri — Retail Investor — Analyst
Hi, good evening and congratulations on a good set of numbers, I think this is one of the best, so [Indecipherable]. I have couple of questions, one you briefly touched upon this Spree Hospitality. Can you just give the contribution of Spree to the bottom line as of now? I think it’s already one year that we acquired Spree, how is it doing on revenue front and what’s the profit that we are making as now? And the second question, go ahead, yes.
Prashant Pitti — Co-Founder and Executive Director
Yeah, I like to just answer the question because I might even forget this question. So Spree is doing really well for the company, I don’t think so we have given very specific numbers, but I’m happy to give an indication that this quarter in the bottom line which is profit, Spree added about INR30 lakhs for the organization.
Gautham Kotagiri — Retail Investor — Analyst
Great. And my second question is on the overall marketing strategy for us. I see we are sponsoring big ticket events off late and events that are lined up across the year. In the last quarter, that is Q2, we had about 30 crores in marketing and sales promotion expenses and in the Q3 we have about 20. So can you share us some guidance on how this is going to span out in the future quarters that?
Prashant Pitti — Co-Founder and Executive Director
So as you have rightly mentioned, the marketing budget for this particular quarter has reduced substantially as what we spoke in the last earnings call that the Asia Cup sponsorship was one of the event and which added almost INR13 crores to the cost of the company on marketing side. However, it is paying-off really well for the organization. As we mentioned that despite reducing the discounts, we are still giving the market share. I believe that a lot of credit goes to our branding initiatives, which we are taking.
For this particular quarter, our marketing expenditure actually is in line with what expenditure we have been taking as a percentage of GBR. This quarter it was around 0.9% and if you look prior you would always find our marketing expenditure to rightly anywhere between 0.9% to 1%. So for future guidance as well, we would want to continue growing our marketing expenditure as a percentage of GBR keeping in between 0.8% to 1%. This effort will only help us to grow our GBR even faster, hence maintaining this pace is not a bad thing for the company.
Gautham Kotagiri — Retail Investor — Analyst
Sure, yes. Thank you. I just had one more question. Recently, I saw some news about acquisition of a company Glegoo, right?
Prashant Pitti — Co-Founder and Executive Director
Sorry?
Gautham Kotagiri — Retail Investor — Analyst
So I saw some news about we might…
Prashant Pitti — Co-Founder and Executive Director
We recently acquired Check-in, yeah…
Ashish Bansal — Chief Financial Officer
Glegoo is the legal name of Check-in.
Gautham Kotagiri — Retail Investor — Analyst
Okay, okay, excellent. Thank you.
Prashant Pitti — Co-Founder and Executive Director
So what was your question around it?
Gautham Kotagiri — Retail Investor — Analyst
No I just wanted to know what business is Glegoo into, I got the answer.
Prashant Pitti — Co-Founder and Executive Director
Thank you.
Operator
Thank you. Our next question is from the line of Saket Kapoor with Kapoor & Co. Please go ahead.
Saket Kapoor — Kapoor & Co. — Analyst
[Foreign Speech] Prashant Ji and thank you for this opportunity. Sir, just a word on this Check-in point and the non-scheduled flight, that’s the business model. So if you could just dwell more into the non-scheduled one and the checking option, how are the customers going to experience something better by these two line item, sir?
Prashant Pitti — Co-Founder and Executive Director
I think I did answer this question, you may not be there at the call at that time, but I’m happy to reiterate. Well, basically the non-schedule, which is Nutana would help customers to basically book non-scheduled air flight tickets on EaseMyTrip and also corporates and individuals who would want to basically lease out the charter or the air fares on these metric, we already have a decent traffic for scheduled travel, non-scheduled air travel it could also be utilized by the help of Nutana for EaseMyTrip.
For Check-in, it would enable customers to basically bargain for the last-minute booking for the hotel, rather than if a hotel is showing a price of INR6,000 rupees everywhere including at EaseMyTrip, a customer who wants to check-in let’s say three hours from now might quote a price INR4,000 rupees for a night and hotel actually might accept it because that’s an additional revenue which they are getting. The reason why hotels do not publicize the price of INR4,000 is because that decrements their brand value. But in this particular case, the deal came from a customer who is willing to pay INR4,000 and hotel accepting that deal, that means that price was not published publicly. And that is why hotels could be very eager to take the last minute looking at a cheaper discounted price, which is not available anywhere including at EaseMyTrip and hence Check-in can miss the draft of last minute booking, it already has about 60,000 hotels which has logged in into the platform and we’re looking forward to grow that number and offer Check-in services using their mobile web and application to our customers.
Saket Kapoor — Kapoor & Co. — Analyst
So, sir this checking option is only subject to the hotel booking and will this go down for air tickets also because we find the same rest applicable even for last-minute air ticket booking where the prices are significantly higher than what the average being for 10, 15 days, the last minute travel.
Prashant Pitti — Co-Founder and Executive Director
I might not be able to comment on that. Currently, the business model of Check-in is basically last-minute booking purposes, let me put it this way. I might not be able to comment whether airlines will or will not be willing to to accept this kind of business model, but for hotels, it’s a very surely win-win situation. As they do not — they can continue to increase their price on OTA for the last minute booking, but for check-in they should be happy to get a discounted price for the last-minute as otherwise the inventories remain unsold.
Saket Kapoor — Kapoor & Co. — Analyst
Right, but the rationale still remain for the air ticket also because the seat remain vacant because of the high prices, is that…
Prashant Pitti — Co-Founder and Executive Director
The rational — because the hotels, number of hotels are in millions, while the number of airlines are in numbers of 10s and hundreds if you look internationally as well. So there might be a change in rational behind it, but again I would not like to speculate either way, it might or might not work.
Saket Kapoor — Kapoor & Co. — Analyst
Right sir. And one more point sir want to understand is, what are the key entry barrier in the business model set up by EaseMyTrip looking at the type of valuations we people are commanding today and definitely you have guided for significantly higher percentage in EBITDA terms, in terms of percentage even higher at 50%. So what are the key entry barriers you feel in the business that you will not attract bigger competition going ahead that the type of numbers now the actual case we see.
Prashant Pitti — Co-Founder and Executive Director
See, we have — there is good competition ever since we were born, it’s been 14 years and we have had six or seven heavy players who have — who all have reached significant amount of capital, while we grew boot strapped even till today to all our investors I would like to share one fact which is in the first five years of EaseMyTrip. We only put in INR15 lakh, INR15 lakh of our own capital in the company. That’s the only amount which went inside the company for the first five years and hence company actually grew while having very strong fundamentals not by throwing money at the problem.
It would be very, very hard for you to find a consumer boot strapped consumer tech unicorn in India, I believe there are only couple of them and EaseMyTrip is one of them. So the foundation of the company is extremely strong and we look forward to utilize our strong foundation of being extremely high-cost efficient company and while growing via word-of-mouth and on also running being the only UT in India who runs our own call-center. We believe that we are poised to continue our growth not just in India, but worldwide, as we have mentioned that we have opened up three offices and our Dubai business is growing really, really strong and so is our UK business and Thailand business.
And we look forward to become the UT for the world, not just for the India and we really believe that the world is our oyster level given the extremely competitive cost advantage which EaseMyTrip has and on top of that which India has compared to this developed nation. We really believe that we can be the lot of incumbent players across the world by not charging convenience fees where they are charging anywhere between INR500 to INR2000 per passenger as convenience fees because their business model requires so.
So these are significant advantages our organization has and we look forward to do and create value for all our shareholders, customers and everyone.
Saket Kapoor — Kapoor & Co. — Analyst
Just a small Check-in question sir, when are the lock-in of share for the promoters, the deadline, getting over?
Prashant Pitti — Co-Founder and Executive Director
I would not be able to comment on that. I mean I think this probably would be — I’m also not sure myself.
Saket Kapoor — Kapoor & Co. — Analyst
And sir I congratulate you especially for the — not only for this not charging the convenience fees, but also for the total refund which your customers are getting in case of illness and that is really a game-changer for air ticket, so kudos to the team and for the ideas also.
Prashant Pitti — Co-Founder and Executive Director
Thank you. We have heard it multiple times that having an extra insurance that people would get their money back, if they fall sick, 100% money would be refunded by EaseMyTrip, it’s absolutely a big reason why people are switching to EaseMyTrip over other.
Saket Kapoor — Kapoor & Co. — Analyst
Yes, sir and sir for this shareholder promotion scheme, what kind of — what is the amount we are spending and if you could give the advantage pertaining to who would be the section of the shareholders who would be benefiting from the scheme and the amount we are going to spend.
Prashant Pitti — Co-Founder and Executive Director
This scheme is basically for the retail investors who would be basically be able to book their flight, hotel, buses at a discounted price, because they are the shareholders of EaseMyTrip by using E&T family as a whole. I believe more detailed information is available online.
Saket Kapoor — Kapoor & Co. — Analyst
But any amount you can give that we are sacrificing on or we are just trying to bring the brand for — we will be spending annually on the same?
Prashant Pitti — Co-Founder and Executive Director
I do not consider that as an expense, that’s a value which we are adding to the life of the shareholders who have added tremendous value in the life of EaseMyTrip. So, it’s only going to the families. This is how we see it as and I would not be able to give you the exact amount, but it is going back to the family.
Saket Kapoor — Kapoor & Co. — Analyst
Correct, sir. And one more on the hotel package part, for this quarter I think so this is the seasonality factor because of which the revenues and the profitability has been there or what should we look what is the understanding for Hotel Packages on an annual basis, what kind of revenue and the bottom line are we looking from the scheme?
Prashant Pitti — Co-Founder and Executive Director
It’s very difficult for me to predict the numbers because the numbers are growing so rapidly for the hotel and non-air and we look-forward to continue growing this particular piece without burning any holes in the company, as we’ve as I said before that we truly believe that businesses are done only for two reasons, one is to basically add value to your customers lives and second is to do it profitably, so you can do it consistently, on VC money, PE money, you cannot do, you cannot give discounts for a really long period of time and consistency can only be done if you are doing anything profitably. So we really believe in consistency and we look forward to grow our hotel and non-air business as we have grown our air business over the due course of time.
Saket Kapoor — Kapoor & Co. — Analyst
But sir, lastly sir on the valuation front, what comfort should investors have — the type of valuations currently commanded, I think so we came with bonus issue, there is lot of floating and then again if we look at your numbers and that type of fees, which we are commanding today, what kind of annual compounded growth can we look to sustain these valuations sir, if you could…
Prashant Pitti — Co-Founder and Executive Director
See, I mean I would not be able to comment anything on valuation part that is from our to decide. You can see that last year we had done our gross booking revenue of INR3,700 crores. And in this year in the first nine months, we have touched almost INR1,000 crores. This should give you enough comfort of where the company is heading towards and that to doing it profitably. So again on dilution part I may not be able to comment anything beyond this.
Saket Kapoor — Kapoor & Co. — Analyst
Okay. And for the nine months the cash generation, can you give the number in the cash flow how are the…
Prashant Pitti — Co-Founder and Executive Director
We put cash flow once every six months, so we did report during the quarter two and in the next quarter we will be reporting cash flow again.
Saket Kapoor — Kapoor & Co. — Analyst
Right sir and thank you, Prashant ji for all the elaborate answer and truly doing a commendable job in terms of how the best the technology can be used for the benefit of your consumer, sir. Thank you.
Prashant Pitti — Co-Founder and Executive Director
Thank you.
Operator
Thank you. Our next question is from the line of HS, with AUM. Please go ahead.
Unidentified Participant — — Analyst
Sir, going ahead, will we be able to see any operating leverage you know with kind of the employee cost not growing in-line with the revenues and same goes for other expenses?
Prashant Pitti — Co-Founder and Executive Director
For employee expenditures, I think you should be able to see some leverage in the next couple of quarters. There was an heavy investment on employee side, especially since we are growing internationally, but overall I think, yes, you should be able to see leverage coming in the next couple of quarters.
Unidentified Participant — — Analyst
Okay. So and other expenses also?
Prashant Pitti — Co-Founder and Executive Director
As I mentioned about other expenses, some portion of other expenses would basically be — will grow in cumulation with the GB as it is a percentage of commissions which we get to B2B2C clients of our own. Hence some percentage just like discounts to customers, some percentage of other expense will also be part of the equation. But again, yes, you’re absolutely right, the admin costs and other costs should not increase as much as we grow our GBR. So yes, there will be some level of operational efficiency, which will come along the way.
Unidentified Participant — — Analyst
Okay. Going ahead, sir, I had one more question, so quarter-on-quarter our hotel segment revenue have increased from around 5.5 crores to 24 crores and which was negative in the last year. So can you just give clarity on the same?
Prashant Pitti — Co-Founder and Executive Director
The numbers have increased as we have mentioned that we have also started the group booking and the mice movement. So certain percentage is coming from the group bookings and mice movement and that is why you also see a new line-item which is service cost to the company which is around INR10 crores. So a good portion of increase has happened organically, but there is also one big push portion which is of the new line-item which is the group and might booking because of it the numbers have substantially jumped up.
Unidentified Participant — — Analyst
Okay. And any reason why would it be negative for the same quarter last year so as given in the results?
Prashant Pitti — Co-Founder and Executive Director
Ashish ji?
Ashish Bansal — Chief Financial Officer
Now as you said, Prashant, right now our all segment are profitable, but last year it was the discounts which we gave in this segment more than the revenue that’s why it was billable.
Prashant Pitti — Co-Founder and Executive Director
It was slightly I mean what you’re saying is around that could INR50 lakh rupees, right?
Ashish Bansal — Chief Financial Officer
Yeah.
Prashant Pitti — Co-Founder and Executive Director
Yeah, so it was basically — we are trying to breakeven our total segment by whatever commissions we are getting from the aggregators, by passing it back to consumers and grow our hotel business — INR50 lakh is basically a breakeven according to us.
Unidentified Participant — — Analyst
And sir and this last question, so what kind of EBITDA margins would be a sustainable number going ahead?
Prashant Pitti — Co-Founder and Executive Director
As I mentioned earlier, at the current level where we are at 45%, I believe this number should be sustainable and should only go up as operating levels will continue to exist. As we continue to grow our business, I believe that this number should only go up slowly and steadily.
Unidentified Participant — — Analyst
Okay. Thank you.
Operator
Thank you. Our next question is from the line of Swapnil Potdukhe with JM FL. Please go ahead.
Swapnil Potdukhe — JM Financial Ltd. — Analyst
Hey, hi Prashant, thanks for the opportunity again. So I just wanted to get a sense on your take rates, they seem to be holding well, but what we have seen in one of the competitors numbers is that the airline take rates have come off in the recent quarters. So, I just want to…
Prashant Pitti — Co-Founder and Executive Director
Sorry, on the competitor side, what the airline take rate?
Swapnil Potdukhe — JM Financial Ltd. — Analyst
Airline take rates have come off sequentially, so I wanted to get a sense on like how the take rates are playing out for us on the airline side? And is it a fact that the increase in revenue-share or GBR share of hotels and tours business helping us maintain our take rates at a flattish level or slightly better?
Prashant Pitti — Co-Founder and Executive Director
No, I don’t think so that the 10% of business could impact the take rate of airlines as much if and if you are seeing in the last three quarters, our take rates have been pretty stable anywhere between 8.5% to 3.7%, it has only gone up slightly. We do business slightly differently compared to our competitors because of which things might not directly be corelated with what they are seeing and we are happy to continue enjoying the take rate which we are enjoying right now, it is pretty stable since last three quarters as you can see.
Swapnil Potdukhe — JM Financial Ltd. — Analyst
Can I call it same factor that are helping you get better take rates than the competition?
Prashant Pitti — Co-Founder and Executive Director
Those are industry trade secrets, something which we would not like to describe.
Swapnil Potdukhe — JM Financial Ltd. — Analyst
Okay, Prashant.
Operator
Thank you. As there are no further questions from the participants, I now hand the conference over to Prashant Pitti for closing comments.
Prashant Pitti — Co-Founder and Executive Director
Thank you. Well, to conclude, I would like to highlight that in our recent acquisition, ongoing brand building investment and our unique know convenience fees model. We are positive that we will continue our exceptional growth journey and remain the fastest-growing OTI in the industry. We will continue to operate with the same disciplined approach that has helped us to deliver profit. The tourism industry is expected to get lot of atraction in the next coming years. On the back of these projects and schemes undertaken by government towards the development of travel infrastructure in the country. We firmly believe that E&T is best placed to capture the growing opportunities in the periods to follow. Thank you all for attending today’s call. We hope all your queries were answered, feel free to reach out to us if you have any other further queries. Thank you so much.
Operator
[Operator Closing Remarks]