'We'll focus on corporate travel market’
Last year was a hectic one for travel major Thomas Cook India. A change of ownership was followed by top level management changes.
By Sudipto Dey, TNN |
Last year was a hectic one for travel major Thomas Cook India. A change of ownership was followed by top level management changes. The task of integrating three acquisitions added to the challenge. Udayan Bose, an international banker and finance expert, joined the company as its non-executive chairman in January last year when Dubai Financial LLC bought out Thomas Cook India. In an interview with ET, Mr Bose said the company would now focus on consolidating its business, building on its strengths in the foreign exchange business, while getting more aggressive on corporate travel, and meeting & incentives segments.
What were the main challenges when you took charge of the company?
At the company level our costs were quite high. While cutting down on costs was one of the areas we worked on, we also made better use of the appraisal system of employees to monitor their efficiency. Our cost to revenue ratio is currently at around 62%. Over the next 12-18 months we plan to bring it down to 55%. We would like to maintain it at the 50% level.
Managing and integrating the companies we have acquired — LKP’s forex unit and TCI — with our existing units was the other big challenge we faced. This needed some organisational restructuring to avoid duplication of work and will go on for some more time. We also brought in fresh talent into the organisation. Our goal is to always remain ahead of the market. Thomas Cook is more visible today than it was last year.
What is the focus now that you have various businesses in your portfolio?
On the business front, we have a dominant leadership position in the forex business. TCI gives us the reach in in-bound and outbound travel business. We would like to focus on corporate travel market while be more aggressive on Meeting, Incentive, Conference & Exhibition (MICE) space.
Currently around 70% of our topline revenue comes from the forex business, with the share of inbound and outbound travel being 25% while the rest comes from other businesses. Going forward, with TCI in our fold, the share of travel business will grow to 35%, with forex’s contribution coming down to 60% .
How did you manage the fallout of an aggressive M&A strategy on the employees, with many seniors leaving the company in the last one year?
There were some realignment of jobs to avoid duplication of work. Following the acquisition of three companies over a span of one year, our workforce ballooned from around 1,400 to over 3,000. Teams had to be rationalised and this saw around 500 people leaving the company. But we also brought in fresh talent in senior positions. We had to restructure the salary packages in TCI. To incentivise performance, we want to give ESOPs to the management teams in Thomas
Cook and TCI.
Any more M&A plans within India or in the neighbouring countries?
What are your plans for the travel business that you have acquired?
Are planning to launch your own travel brand in light of the fact that the Thomas Cook brand would go back to the parent company after some time?
We are not worried on that count as of now. That is still some time away. The brand continues to be with us for six years.
At the company level our costs were quite high. While cutting down on costs was one of the areas we worked on, we also made better use of the appraisal system of employees to monitor their efficiency. Our cost to revenue ratio is currently at around 62%. Over the next 12-18 months we plan to bring it down to 55%. We would like to maintain it at the 50% level.
Managing and integrating the companies we have acquired — LKP’s forex unit and TCI — with our existing units was the other big challenge we faced. This needed some organisational restructuring to avoid duplication of work and will go on for some more time. We also brought in fresh talent into the organisation. Our goal is to always remain ahead of the market. Thomas Cook is more visible today than it was last year.
What is the focus now that you have various businesses in your portfolio?
On the business front, we have a dominant leadership position in the forex business. TCI gives us the reach in in-bound and outbound travel business. We would like to focus on corporate travel market while be more aggressive on Meeting, Incentive, Conference & Exhibition (MICE) space.
Currently around 70% of our topline revenue comes from the forex business, with the share of inbound and outbound travel being 25% while the rest comes from other businesses. Going forward, with TCI in our fold, the share of travel business will grow to 35%, with forex’s contribution coming down to 60% .
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How did you manage the fallout of an aggressive M&A strategy on the employees, with many seniors leaving the company in the last one year?
There were some realignment of jobs to avoid duplication of work. Following the acquisition of three companies over a span of one year, our workforce ballooned from around 1,400 to over 3,000. Teams had to be rationalised and this saw around 500 people leaving the company. But we also brought in fresh talent in senior positions. We had to restructure the salary packages in TCI. To incentivise performance, we want to give ESOPs to the management teams in Thomas
Cook and TCI.
Any more M&A plans within India or in the neighbouring countries?
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Our focus over the next one year would be to integrate and grow our existing business. This year we are consolidating our gains and trying to garner more market share in existing businesses. We have looked at some opportunities in neighbouring markets, but the time is not right to enter them yet. What are your plans for the travel business that you have acquired?
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Tapping the corporate travel segment is something that I am personally very bullish about. Our MICE business is set to grow exponentially. We have already doubled our business from the MICE segment in the past one year. We are also looking at venturing into the online space. In the travel business we are introducing newer brands through TCI, both in inbound and outbound spaces. We will launch new products during Dussera and Diwali holidays this year, while several new products would hit the market next year. We would like to leverage TCI’s presence through their offices in 13 countries. In fact, with growing international travel out of India, we can leverage our travel business to build on our leadership position in the forex market. Are planning to launch your own travel brand in light of the fact that the Thomas Cook brand would go back to the parent company after some time?
We are not worried on that count as of now. That is still some time away. The brand continues to be with us for six years.
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