Some brands just nail it when it comes to staying tuned.
According to a report by McKinsey and Booking.com, travellers in India took 1.7 billion leisure trips in 2022 but only about 1% travelled abroad. The report projects that Indians will take a whopping 5 billion leisure trips by 2030, nearly 99% of which will be within the country too. Spending on travel and tourism is predicted to reach $410 billion by 2030, which is a surge of more than 170% from $150 billion in 2019.
It’s easy to see why Thomas Cook India is tweaking its itinerary. So if last year the focus was to customise holidays for travellers and calling itself ‘India ka Holiday Specialist’, this year the company is betting its shirt on the growing domestic tourism segment. The omnichannel travel services company has roped in cricket star Ravichandran Ashwin and actor Vikrant Massey for its new advertising campaign that talks about the diverse travel opportunities the country offers. That apart, looking at the surge in demand for spiritual tourism, Thomas Cook and its group firm SOTC Travel have partnered with the Uttarakhand Tourism Development Board to offer aerial darshans of Adi Kailash and Om Parvat. The five-day spiritual tour will set back a traveller by `90,000, subsidised to an extent by the Uttarakhand Tourism Development Board.
Abraham Alapatt, president & group head (marketing, service quality, value added services & innovation) for Thomas Cook India, says domestic travel was not a big focus area for the company even until two years ago. It was big in the outbound travel market and had a significant presence in the business travel and MICE (meetings, incentives, conferences and exhibitions) space. But now, roughly 20% of the company’s revenue (in rupee terms) from its travel business comes from domestic holidays.
He points at some recent trends in the market to justify the company’s change in focus. In recent years, Thomas Cook has seen a 20% year-on-year growth in its domestic travel business. In general, the holiday ticket sizes have become bigger because people are flying rather than taking the road or rail, and are staying in better hotels. “There is a clear shift from one long annual family holiday to as many as 3-4 short family holidays every year,” adds Alapatt. That presents a huge potential for growth, with the organised travel players serving only 7-8% of the total travel market in India currently. “We do not offer anything less than three-star hotels and the number of three-star and above hotels have increased across the country in the last few years,” he adds.
What will give domestic travel a boost is the fact that airfares are 8-10% lower now compared to the recent couple of years, but on international routes, they are still 20% higher than previous years. It may take 12-18 months to see some moderation in airfares, say observers.
“After 2022, India’s domestic tourism witnessed a significant increase as a result of easing lockdown restrictions and opening of international borders. Locations such as Lakshadweep, Ladakh, Gujarat, Rajasthan, Assam and J&K have been leading the way. Sustainable tourism in particular presents immense growth opportunities with a CAGR of around 20% by 2032,” says Nilachal Mishra, partner and head, government and public services, KPMG in India.
Taking flight
What does the future look like as online travel bookings become a norm rather than an exception? Alapatt points out that the average age of a Thomas Cook customer is 10 years younger now than what it was before the Covid pandemic. “We recognise that teenagers and young adults — though they are not the highest earners in the household — are influential when it comes to decisions about family vacations. So we are designing products and experiences such as adventure holidays and trekking trips for them,” says Alapatt.
Thomas Cook is pretty clear that it operates in the premium mass segment so there is no point in joining the discount war. It is targeting consumers who look at vacations as time out to make memories and to savour new experiences.
Given that the target is getting younger, the brand, which was traditionally a TV and print advertiser, is now diverting nearly 60% of its print budget to digital. Thomas Cook says that customers can complete the entire booking process on digital platforms right from sending documents to making payments.
Business strategist and independent director Lloyd Mathias suggests that while the younger consumer segment is critical for players like Thomas Cook, it would do well to also target the older customer cohort. He notes, “Affluent customers over 50 years of age usually have both the time and the resources to travel extensively, so the brand would do well to reach out to this consumer segment too.”
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