Nearly six months after change in its ownership, Thomas Cook India is exploring opportunities to expand its business beyond travel and foreign exchange services through acquisitions.
“We will look at a variety of opportunities related to travel, and therefore, aligned in our vision. We will broaden the scope of our search rather than saying it will only be a travel company,” Madhavan Menon, managing director, Thomas Cook India, told Business Standard.
Menon indicated the company would look at services areas to grow its business, but ruled out any investment plan in asset-heavy sectors such as hotels. “My majority shareholder is an investment company. They will always look at opportunities.”
In May, Fairbridge Capital, a fully-owned subsidiary of Toronto-based Fairfax Financial Holdings, picked up a 77.1 per cent stake in Thomas Cook India for Rs 810 crore.
According to the licensing agreement with its London-based parent, the company can use the brand name Thomas Cook till 2025 only. While the company’s strategy is to “milk the brand” as much as it can, in the meantime, it may also look at an early transition.
“Would I spend 21 years transitioning out of Thomas Cook, I am not too sure,” Menon said. The company also has an option to renegotiate an extension of the brand licensing agreement with its parent.
Besides, the company is planning to expand its franchise distribution network from 129 to 142 next year.
Alongside, it is also ramping up its online platform, shifting some of its services on the web. For instance, the company is testing a model to book foreign exchange online and deliver it at the doorstep of the customer within 24 hours. Menon said the company could not invest in technology so far due to a variety of compulsions at the parent level.
“By recalibrating our technology and improving our product offering on the internet we will be able to balance our existing structure which is more brick and mortar,” he added.
Thomas Cook is also in the process of devising its advertising strategy after it came up with its string of advertisements on the lines of, “don’t just book it, Thomas Cook it” earlier this year.
“We may go for a refresh, but making a new film every year, I don’t think I have the money for that,” Menon said.
The company is trying to tap the opportunities in the leisure travel business. Currently, nearly 60 per cent of its business comes from foreign exchange.
“Forex is a mature business. Leisure travel will grow more aggressively from a smaller base,” Menon added.