A new map for Thomas Cook

Old travel brand reinvents itself to cater to changing customer expectations

Selling holiday packages and foreign exchange is a routine business for Thomas Cook something it has been doing for decades. But over the last several months Thomas Cook has had to plot a new route to make its way across a familiar world of holiday travel. In line with changes in customer behaviour and with the growing shift towards digital bookings, Thomas Cook has ramped up its online presence and repositioned itself as a hybrid, rather than a pure brick and mortar, entity. 

Competition from online travel companies such as MakeMyTrip has been a trigger too. As more and more Indians purchase air tickets and hotel rooms online, the company realised that it had to rapidly reorder its operational priorities. But the challenge was to leverage the brand’s traditional strengths while bringing about the transformation.

“Four years ago ours was a 100 per cent brick and mortar business and then we took a call to strengthen our online business. We set up a dedicated vertical for e-commerce and now about 20 per cent of our sales come from online platform,” said Abraham Alapatt, Thomas Cook’s president and group head (marketing). He said that the company took a conscious call to switch to the hybrid model, instead of becoming a pure-play online travel brand. 

Research online, buy offline

Customer research indicates that people in India are increasingly researching holidays online; looking for best hotel and flight deals, places to see or scoring unique experiential milestones. But a majority of transactions still take place offline or through a travel company website. 

Thomas Cook put its years of understanding of the holiday market to offer customers a greater choice of packages, routes, deals and so on. But to reach the customer, it stepped out of the kiosk-agent-store channels and strengthened its online presence. 

This has led to the brand’s sharper digital presence, not just in terms of a website that allows online bookings but also a more flexible approach to routes and destinations. Packages that can be changed to cater to travelers across age groups, instead of a one-experience-fits-all strategy has helped the brand craft a younger identity for itself. 

Thomas Cook has made changes in branding and marketing too. All its campaigns and advertisements are now under the thomascook.in banner which makes the website a referral point while reinforcing the brand’s digital imprint. “We are creating visibility for our online business,” Alappat said. And the results have been positive.

Customers are increasingly purchasing holiday packages, foreign exchange and applying for visas online. A lot of weekend tours too are booked online. “We have developed a range of base level products including flights, accommodation and basic sightseeing for destinations in South 

East Asia, Gulf and Europe which can be booked online. Through our call centre, we persuade our customers to book more options or excursions,” he said. Last year Thomas Cook also launched its mobile app which allows customers to search, select and buy packages and so far has seen over 100,000 downloads.

Selling a holiday package online is a different experience altogether, it is not like selling a manufactured good. It takes several phone calls and emails before a deal is clinched. “Sometimes people do not know that what all services can be availed online. Buying a holiday package is a well-considered decision involving the entire family and these do not happen at the spur of the moment,” he said. Thomas Cook has also taken its foreign exchange business online and has come up with several products that are better suited to frequent travelers.

Many brands, multiple identities

Thomas Cook is also creating a greater online push for SOTC, the travel firm which it acquired from Swiss tour operator Kuoni in 2015. “The focus area for us is now to build SOTC as an e-commerce brand. You will see it having a bigger play in the hybrid segment,” Alappat said. He is clear however that the two brands will continue to cater to their customer bases and function as separate entities.

Sterling Holidays (also a part of Thomas Cook) and SOTC have their own marketing campaigns which are distinct from Thomas Cook. There are back end synergies in contracting and procurement but campaigns, experiences and packages are unique to each company. 

Thomas Cook and SOTC may have similar products and similar price points but both have a separate brand identity and brand look. “There is healthy competition within the two companies and customers get more value. Problems arise when you force the acquired company to look like the acquirer. This is disastrous because you erode the very value for which you bought the company,” Alappat said.

The company’s switch to a hybrid model coincided with the change of ownership. In 2012 Prem Watsa-led Fairfax acquired a 77 per cent stake in Thomas Cook India from its British parent. Under Fairfax, Thomas Cook has doubled up as an investment vehicle and owns stakes in Ikya (rebranded as Quess), a staffing solutions firm, Sterling Holidays and Kuoni India (rebranded as SOTC). Last month it acquired the destination management business of Kuoni in 17 countries – a move which marks its foray in inbound travel segment and giving it a pricing advantage over its peers. 

In nine months of FY16, Thomas Cook clocked revenues of Rs 1,417 crore and net profit of Rs 8 crore on a standalone basis. During the same period, consolidated revenue was Rs 6,528 crore and consolidated profit, Rs 83 crore. These numbers include those of Quess and Sterling Holidays.