Thomas Cook India is getting its strategy for future growth in place, with its new majority shareholder, Fairfax Holdings keen on tapping investment opportunities. In conversation with Ruchika Chitravanshi, Madhavan Menon, Managing director of Thomas Cook India shared how he plans to forge ahead for the second innings of the company. Excerpts:
It has been over six months since Thomas Cook Had a change in ownership. What all has changed?
There is only one change, which is in my majority shareholding. There has been no other change. Are they running the company, the answer is no. I am still here. At management level it is business as usual.
Now that you have the Thomas Cook brand for over 12 years, how will you build your own brand identity?
We have been dealing with the change in ownership. We have a new marketing head on board. We will come up with a strategy in over a period of time. Right now my strategy is to milk the Thomas Cook brand as much as I can. But would I spend 21 years transitioning out of Thomas Cook, I am not too sure. So that is the roadmap we are still working in progress. These are my personal thoughts
You must remember that India is proliferating with international brands and therefore it is not necessarily the brand which will drive the business, it is the quality of service. The telecom space is a classic example. Vodafone is a global brand but reality is that Bharti is the market leader. I am not saying one is better but as Indians become aware of international brands on a day to day basis they will no longer look at brand affinity but at the service.
What are the areas you would like to grow inorganically? Are there any acquisitions on the anvil?
We will never close the door on potential acquisitions provided it meets our requirement. I must draw your attention to the fact that my majority shareholder is an investment company. They will always look at opportunity. Nothing on table, we are still in our honeymoon period. We are trying to figure out how the other works. As things settle down and opportunities arise, we will be open. Instead of just travel we will look at a variety of opportunities that are related to travel and therefore aligned in our vision.
What are your expectations from growth coming from the travel segment?
This year we have grown by about 33 per cent, but if I look at my forward bookings, winter is 40 p.c. up over last year. I am certain that despite changes in the value of the rupee, air fares having gone up, we have not seen any dampening in demand from the retail space. In the coming year we will grow even better than 2012. On the outbound my outlook has not changed. I am still cautious because retail demand can swing in any direction. Holidays have become a priority now and they are adjusting it to their budget. You will see budget products, short haul demand. Longer haul will have to see that the pricing is correct. We have focused on maintaining our price lines.
Is Thomas Cook going from a brick and mortar to more of a hybrid model now, given the competition from the online space?
Earlier the world used to believe that the OTA model was the only model that was going to survive and actually I am proud to say we have all survived. We believe that by recalibrating our technology by investing more money into it and building our infrastructure and improving our product offering on the internet we will be able to balance our existing structure which is more brick and mortar. The rationale is very simple, we believe that a lot of travelers that come into our space are first time travellers and they need a lot of hand holding. You cannot sell them a holiday over telephone. This has to be balanced with online distribution and simultaneously to improve our productivity. We will try to move more of our services online. We are examining our options.
Will the focus shift from foreign exchange to leisure travel?
Forex is a mature business. My forex colleagues won’t be happy that the business is going in a demise mode, but the business will grow more gradually from a larger base. Leisure travel will grow more aggressively from a smaller base.
Is there any plan of rationalising your staff?
We are not rationalizing staff. We will focus the next 24 months to improve the productivity of our staff and company through greater training and improving the skill sets. Focus is to improve productivity.
It was a tough year for travel industry. What is your outlook for the coming year?
It was a difficult year from environment point of view and also since we were up for sale for the most of 2012. Despite all of this we have focused on stability. Barring global calamity, the worse in terms of economic slowdown is over.