Mumbai: India’s oldest travel house, Thomas Cook India Ltd, is turning around its business strategy to cope with increasing competition and fight off the lingering effects of an economic downturn.
As part of the new model, the publicly traded firm is reaching out to consumers through urban malls, such as Phoenix Mills, InOrbit and Oberoi mall in Mumbai, and new foreign currency outlets in tier III towns that will also sell travel products, managing director Madhavan Menon said.
“Earlier, people used to come to us. Now, we are going towards them, as packaged holidays are getting much complex and more people need personal touch,” he said.
The firm is also positioning itself as a one-stop shop for tickets, hotels, holiday products, visa processing and foreign currency.
Thomas Cook India has already set up visa application facilities in Mumbai, New Delhi and Chennai.
The new programme comes at a time when foreign tourist arrivals (FTA) into India have slipped 9.3% between January and June, compared with a 5.6% growth in the first half of last year.
According to the Union ministry of tourism, FTAs in September were 317,000, marginally down from 331,000 a year earlier. FTAs were 302,000 in September 2007.
Provisional figures from the ministry of tourism show that 10.8 million Indian nationals travelled abroad in 2008, up from 9.78 million in 2007. However, percentage growth declined from 17.3 to 8.8, after four consecutive years of double-digit growth beginning 2004.
“There were three choices during the slowdown. The first one was stay wherever you are, and second, increase your agent network. The third choice was to expand. We opted to expand,” Menon said.
The firm plans to add 52 outlets by July, both in cities where it is already present and in new regions, taking the total number to 212.
Among the new cities Thomas Cook India has identified for expansion are Bharuch, Vrindavan, Nawa Shahar, Karnal, Kapurthala and Bathinda in northern India; Nashik, Kolhapur and Bhopal in western India; Salem, Tirupati, Thrissur, Kannur, Hubli, Udupi and Trichy in southern India; and Gangtok in the North-East.
According to a travel consultant, who did not want to be identified, other travel firms such as Cox and Kings India Ltd and SOTC, a unit of Kuoni Travel (India) Pvt. Ltd, are also increasing their retail presence, though through travel agents and franchises.
“But the real competition would be from small-time travel firms,” he predicted. “These unorganized firms will pose intense competition and margin pressure for organized players. Moreover, the travellers are much demanding as they are well informed through websites about destinations.”
Menon said there could still be space for at least two more organized players. As for speculation about a weakening foreign exchange business, Menon said Thomas Cook is upbeat on its forex business that grew 78% in the fiscal year ended March.
Business from students who are studying abroad has grown by 35% so far this calendar year over the corresponding period last year, he added.
India sends one of the highest numbers of students overseas for studies, and is among the top nations sending students to the US.