Mumbai: Madhavan Menon, Chairman & MD, Thomas Cook India is part of the Malayali quartet at Fairfax Financial Holdings-owned entities in India. The others are Ramesh Ramanathan of Sterling Holiday Resorts, Hari Krishnan Marar of Bengaluru International Airport and Ajit Isaac of Quess Corp.
Menon, who has been holding the post of MD since 2006, was elevated as Chairman in January 2016. He has steered Thomas Cook India through tumultuous times to a pole position in the tourism industry today even while it changed ownership from Thomas Cook Group to Fairfax Financial Holdings. He has been a champion of value accretive M&As all through – LKP Forex in 2006, Travel Corporation of India (TCI) in 2007, Ikya Human Capital Solutions (now Quess Corp) in 2013, Sterling Holiday Resorts in 2014; Kuoni India, Kuoni Hong Kong and Luxe Asia, Sri Lanka in 2015, five DMCs of Kuoni Group in 2017 (Asian Trails in Asia Pacific, Allied T Pro in North America, Desert Adventures in Middle East, ATM in Australia and Private Safaris across Southern and Eastern Africa), Tata Capital Forex (foreign exchange) and TC Travel and Services (travel services) in 2017, SOTC Travel Management in 2018 and DEI Holdings Dubai in 2019.
Destination Kerala caught up with Menon in his sprawling office at Thomas Cook India headquarters in Mumbai. Thomas Cook India is the largest player in every segment (inbound, outbound, business & MICE) except domestic travel.
With the wellness offering being challenged by neighbouring countries, a temple tourism focus could be a fillip to Kerala, says Madhavan Menon
According to Menon, 2018 has seen significant growth nationally for the business. Outbound travel to Europe remains their bread and butter. Long haul travel continues to be of higher value and more attractive. Short haul travel which is domestic and to periphery destinations like Dubai, Thailand and Singapore, is catching up. Long weekends are not anymore about friends and family. Everyone wants to travel and holiday as air travel and hotel stay are increasingly affordable for dual income families. Menon predicts domestic and periphery tourism will explode in the next 15 years in India. As highway infrastructure develops further, bus tours and road trips will boom as well across India.
“In outbound, Kerala did good and as far as inbound is concerned, Kerala rebounded well,” feels Menon. “Kerala has overcome the floods in August 2018 and before that the liquor licence issue, remarkably. Sterling has many properties in Kerala and we are seeing their volumes grow after the floods. We are also hosting many conferences in Kerala now. Again as you know, the MICE business was severely impacted by the liquor policy. We expect Kerala market to continue to grow.”
In Menon’s view, Kerala cannot be compared to Goa though beaches in both destinations are world-class. Traditionally, Kerala has focused on wellness and beaches, he argues. “Like Tamil Nadu, Andhra Pradesh and Telangana, Kerala has a lot of temples and should focus on this segment, too.” With the wellness offering being challenged by neighbouring countries, a temple tourism focus could offer a much needed leg up, he feels.
Thomas Cook India started selling holidays in Kerala 7-8 years ago and has witnessed tremendous growth over the years, along with its franchisees and partners. Menon feels Kerala’s demography started to change with the growth in the IT industry. “The average age of the population today residing in Kerala is becoming younger,” he says. “Earlier, the younger generation was working outside the State, mostly in the Middle East, and the parental generation was at home. That has changed and with it needs like holidays, too.”
Travel companies have moved away from selling packages to selling experiences. Younger customers do their research and are far more knowledgeable. They are seeking experiences more than destinations. What differentiates Thomas Cook when more or less the same packages are sold by all leading players? According to Menon, it’s the tour managers. “Our tour managers are the best in industry. We invest heavily to train and retain them. Sixty per cent of our tour managers have been with us for more than five years. Whatever product is purchased, I want the customer experience to be uniform and that is ensured by our tour managers.”
Today, 55 per cent of outbound travel is group-fixed departures. But in the long run, FITs will overtake groups because the search for unique travel experiences continues. “Definition of FITs as we know it today will change,” argues Menon. “Single destination holidays can be done online but if it is 2-3 cities and too many logistics involved, even for domestic travel, one will need a travel expert. The minute a customer defines a trip as the trip of a lifetime, then it has to be an expert because they want it to be experiential. They don’t want anything to go wrong.”
Innovation in business lies in monitoring and addressing new trends. Thomas Cook India has launched ‘Theme Park Holidays’ for children as they are key decision makers in GIT holidays. ‘Ladies First’ launched recently for GIT market is evolving, too. ‘Cruise Holidays’ is another segment slowly evolving in India and since last couple of years, Thomas Cook India has a team looking into that.
India’s outbound MICE segment is a large growing business for Thomas Cook India. “It’s a natural extension of our corporate business. There’s even a rub off on our leisure business and we get to leverage our long-standing relationships with hotels and airlines,” says Menon.
Technology is increasingly becoming critical to sell as well as ensure seamless customer experience during the sale process. “We recognised we may not be doing everything right. So we started looking at startups/small organisations which could add value for us.”
Last year, Thomas Cook India picked up a company called Ithaka. It is a travel planning app for millennial travellers, where a real, like-minded traveller helps a customer plan his or her vacation over a simple chat conversation. Ithaka is building the biggest global community of travellers who will be helping others plan trips and in exchange travel for free themselves. They have already powered trips for over 50,000 travellers and help people plan trips to Thailand, Bali, Malaysia, Singapore, the UAE and now very recently, Europe.
The unique value of the product is the super personalised recommendations across local experiences, hotels, transport and the holistic planning experience. The platform also facilitates bookings of activities, hotels and flights, making it a complete travel platform. Founded in 2015 by Rahul Singh (IIT-B graduate) and Mithilesh Said, Thomas Cook India has invested in their Pre Series A round. It is the first such strategic investment by a travel market leader in India into the travel tech space.
“Ithaka offers us the capability to dynamically package a holiday. About 26 per cent of our packaged holidays are sold online,” confirms Menon. “If I add SOTC, it is about 30 per cent. This 30 per cent also has an element of touch in it. I don’t think selling packaged holidays is ever going to be 100 per cent a seamless online experience. There’s got to be touch. This is true even in the US where multi-city travel is via agent and not online.”
Menon is forthright on two issues addressing the inbound tourism industry in India – GST and visa charges. “Our visa fee is high even if explained away as reciprocal,” he concurs. “If India has to be an attractive inbound destination, then our rates have to be competitive. I don’t think high visa fee adds to the revenue of the government. Somebody needs to see the math around it. If we can reduce the fee and double the traffic, employment, occupancy and spend, then it makes more sense.”
On GST, he has a view quite diagonal to what the industry has been batting for. “Anywhere in the world taxes have to be paid and tourists are used to it,” he reasons. “I don’t have a problem with GST. The export incentive we enjoy should counter balance a relatively higher tax.”
Recently, Thomas Cook India acquired Digi Photo Entertainment Imaging (DEI) which operates in 12 countries across Asia offering candid photography using AI and tech. This is a booth in a place like Universal Studios. Using AI, the computer pulls up candid photos of a customer when there is a request. The cameras are strategically placed and there are cameramen walking around clicking candid photos of hundreds of customers as they experience the product/attraction.
“We will continue to be acquisitive,” confirms Menon. “We generate Rs. 300 crore cash every year. Assuming Rs. 150 crore goes back into the business, we still have Rs. 150 crore to invest. We have no debt so that helps.”