Wednesday, August 28, 2024 Thomas Cook India has achieved its highest-ever revenue and profit in the fiscal year 2023-24, reflecting a significant shift in consumer behavior and the global travel industry’s evolving landscape. The company’s revenue saw a substantial increase of 45%, reaching ₹7,426 crore in FY24, while its net profit surged dramatically from ₹10 crore in the previous fiscal year to ₹271 crore. This remarkable growth can be attributed to the resurgence of both outbound and domestic travel, a trend that began in the aftermath of the pandemic and has shown no signs of slowing down.
Madhavan Menon, the chairman of Thomas Cook India, observed that the surge in travel, initially seen as a form of “revenge travel” following the pandemic, has sustained its momentum. As the world emerged from the pandemic, a noticeable shift in consumer behavior occurred, with travel becoming a significant beneficiary. This trend persisted throughout the fiscal year, with only a brief lull during one quarter, which was affected by the heatwave and elections.
According to Menon, while the growth in demand may not continue at the explosive rate of 40%-50%, the appetite for travel remains strong, indicating a sustained recovery in the industry. A report by MakeMyTrip highlighted that holiday searches have increased by 45% post-pandemic, with over 100 million people searching for travel options on the platform annually. Menon further noted a demographic shift in the Indian traveler, with the average age dropping by 10 years.
Unlike in the past, Indian travelers no longer wait for a certain stage in their careers to plan expensive foreign holidays or even explore exotic domestic destinations. Instead, they are now more inclined to take multiple short holidays, both domestically and internationally, rather than saving for a single expensive trip every few years. The growing preference for multiple short holidays has significantly influenced Thomas Cook India’s business model.
The company’s leisure travel segment saw an impressive 89% growth in FY24. Today, Indian travelers are increasingly comparing domestic trips with short international getaways to destinations like Southeast Asia or Dubai, making travel decisions based on convenience and affordability. According to the MakeMyTrip report, the number of people taking over three trips annually has risen by 25%.
Destinations such as Dubai, Thailand, the Maldives, Georgia, and Azerbaijan have become popular choices for these short holidays. Menon mentioned that pre-pandemic, the Maldives was perceived as an expensive destination, but it has since become a favored choice due to its accessibility and ease of travel. This shift in travel preferences has positioned Indian travelers as a key demographic on the global stage, particularly as China’s role as a leading source of outbound tourists diminishes.
Several countries have recognized this opportunity by amending their visa policies to accommodate Indian travelers. Menon pointed out that nearly 49 countries now offer either visa-free entry or visas on arrival to Indian citizens, a significant increase from just five countries before the pandemic. Additionally, the expansion of flight, train, and bus networks has further facilitated the growth of the travel and tourism industry.
Thomas Cook India has also had to adapt its business operations to meet the changing demands of consumers. Menon acknowledged that customers now interact with the company through various channels, including online platforms and call centers, rather than solely visiting physical branches. This shift in consumer behavior led the company to invest heavily in technology during the pandemic, adopting a bottom-up approach to building its technological infrastructure.
The integration of technology has allowed Thomas Cook India to streamline operations, reduce employee costs, and enhance productivity. The company has also transformed its content delivery, making information accessible online, through call centers, and in branches, while shifting its focus from being a source of information to becoming a facilitator of travel experiences. The improvement of infrastructure within India has further fueled the growth of domestic tourism.
The MakeMyTrip report indicated a 30% increase in tourism to emerging destinations such as Bhubaneswar, Lucknow, and Ujjain. Religious tourism has also seen significant growth, with a 97% increase in visits, partly driven by developments like the construction of the Ram temple in Ayodhya. Menon emphasized that despite the widening airline networks and the launch of new trains, there is still a significant demand-supply mismatch in the country.
However, he noted that the Indian government has recognized the long-term potential of domestic tourism infrastructure development, which, although it will take time, is expected to attract international tourists as well..
