How Thomas Cook plans to regain its business

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Updated: Jul 31, 2020 1:35 PM

The travel agency is now focussing on domestic travel and short-haul international destinations

Abraham Alapatt, president and group head, marketing, Thomas Cook IndiaAbraham Alapatt, president and group head, marketing, Thomas Cook India

After months of inactivity, the travel industry is trudging back to normalcy as bans are lifted and lockdowns eased. Travel agency Thomas Cook is now focussing on domestic travel and short-haul international destinations. Abraham Alapatt, in a conversation with Devika Singh, talks about the pent-up demand among Indian travellers, amplifying digital channels, and the competition from travel aggregators.

Has there been any sign of revival as the lockdown is gradually being lifted?

There has been a steady growth in enquiries since May, and people are planning to travel in October, November and December, and in early 2021. Thomas Cook India and SOTC have reopened more than 190 branches; of course, the number varies based on approval from local authorities. In fact, we have seen green shoots of recovery with not just enquiries, but paid transactions, too — both domestic and international.

When it comes to corporate travel, 70% of the trips were one-way, emergency trips when air travel started; but we are now seeing a surge in return trips. Though the demand is still a trickle as compared to the pre-Covid period, this trend is encouraging.

Are you tweaking your offerings or bringing down prices to keep up with the changing times?

We have relooked our product portfolio and launched several domestic travel products. Our survey in the metros and tier I & II cities revealed that there is a significant pent-up demand —14% of the respondents indicated that they are likely to travel in 2020 once restrictions are lifted. Hence, we have launched domestic products such as workations, staycations and affordable luxury holidays, to tap this demand. These new products offer quick breaks to destinations that are located closer to home and at drivable distances. There is also a keen interest in short-haul international destinations. And for that we are offering a range of short-haul, land-only international destinations starting at an affordable price of Rs 8,200, once the borders are reopened.

Most people are not keen on travelling long distances, taking long breaks or flying by air, and this has brought down the overall ticket size of our products.

How relevant are travel agents in this age of self-booking apps? How tough is the competition from online travel aggregators (OTAs)?

Given the current situation, where there is a lot of uncertainty in the minds of consumers, a travel agent will play an increasingly crucial role in assuring them that all the safety and security concerns are addressed.

Also, we have built a very sustainable model for Thomas Cook and SOTC, covering all the channels in the spectrum — physical as well as digital. India is a hybrid market, and it works in our favour to have a presence in both these channels. This also gives us an edge over the competition.

For most OTAs, business comes from domestic flights, and that too from lost-cost carriers, which is a low-margin and no-profit business. Most of them are still accumulating losses. We do not want to be in that business. We sell flight tickets too, but our focus is on selling integrated holidays and business travel.

What is the contribution of online channels to your business?

Around 25% of our packaged holiday bookings are made through our online channels. We have been striving to give our consumers an omnichannel experience, and our websites now give customers an option to choose their channel of preference — retail store or online customer care agent. For customers who prefer contactless services, we have conceptualised virtual outlets to assist them via phone, chat or a video call.

We have also realigned our marketing strategy towards the digital medium. Earlier the budget was equally divided between traditional and digital mediums, but now the entire budget goes to digital.

What synergies do Thomas Cook Holidays and SOTC share?

We manage both brands separately, as they are both strong brands with a base of very loyal repeat customers. However, to ensure the maximum benefits of our combined in-house expertise, we have consolidated our back-end product and development teams. Additionally, to leverage economies of scale, we contract jointly with partners or suppliers.

Read Also: From connecting with the right consumers to connecting consumers to their passions

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