A leader in many ways, Thomas Cook (India) emerged from the pandemic healthier and more profitable. Madhavan Menon, Executive Chairman, Thomas Cook (India), shares his perspective on the group’s journey since the pandemic hit the world and what worked well for the company to lift its financial results.
At the Thomas Cook Group, we call this returning from the break. During the pandemic, we were forced as were most people in our industry to review and reimagine how we would do this. As a result, we were able to emerge from the pandemic with a variety of activities that ensure that we were able to improve the customer experience, rationalise our costs, and have high level of productivity using technology as well as digitising our processes.
As we re-emerged from COVID, we witnessed strong demand across all our product lines, be it in the travel space at a B2C level or at a B2B level, as well as in some of our subsidiaries like Sterling Holiday Resorts, like DEI and Desert Adventures, and various destination management businesses across the world.
This demand came with a string of conditions obviously – that we needed to ensure that people were kept safe and not exposed to the problems that they had witnessed during the pandemic. As a result, we were able to build strong customer confidence using our experience and improved systems. I think an important element of the strong financial results has been cost rationalisation, During 2021-22, we reduced our costs by nearly 50 per cent across the group. Today, we are at around a cost saving of 30 per cent from our pre-COVID levels. And we expect to rationalise our costs by 20 per cent on a sustainable basis. You will appreciate that all this drops to the bottom line.
An important element of this entire journey of back from the break has been improving our technology and digitising the processes as well as customer interaction to ensure that the customer experience is enhanced significantly. We upgraded our technology to ensure that our customers can start their research on the various Thomas Cook products online before they even reach us either through a call centre, through our website or through the branch network that we have. Consequently, all this has resulted in the company both on a standalone basis as well as a consolidated basis along with the various subsidiaries, performing very well over the last couple of quarters and we expect that this will continue over the next few quarters as well.
Strong financial results
The strong results for FY23 for the group, with a record Operating EBITDA at `2.7 billion versus a loss of `1.2 billion in FY22. Total income from operations also grew annually by 163 per cent in FY23 to `51 billion. This performance was led by Thomas Cook India registering its highest Operating EBITDA and Operating PBT in a decade and
Sterling Holidays recording its highest EBITDA & PBT since the company’s inception.
Our focus through the year has been on driving trading volumes, margin expansion, improved productivity via digital solutions and effective cost optimization measures to achieve this. Given the strong forward booking funnels, across business segments and geographies, we are confident of a strong performance in the coming quarters as well.
Partnerships are key
Under its G20 Presidency, India has set ambitious ESG (Environmental, Social & Governance) goals, & India Inc. has been called on to implement SEBI’s BRSR mandate starting FY23. The need for a trustworthy partner to provide accuracy and speed in reporting is an imperative. At Thomas Cook and SOTC, our leadership in the travel sector formed the basis of our partnership with LTIMindtree – a leading technology solutions provider. ‘Green Carpet’, therefore, not only embodies this potent partnership of leaders, but also leverages the global expertise of Fairfax Digital Services to collectively empower enterprises with the ability to seamlessly monitor and manage business travel emissions and drive their net zero goals.
Highlights for FY23
- The Group’s Operating EBITDA grew significantly to Rs. 2.7 Bn for FY23 against a loss of Rs. 1.2 Bn in FY22. Growth driven by Foreign Exchange & Travel Businesses (Thomas Cook); Hospitality (Sterling Holidays)
- Highest Operating EBITDA & Operating PBT for Thomas Cook in a decade. Operating EBITDA at Rs. 1.2 Bn for FY23; Operating PBT at Rs. 560 Mn Vs a loss of Rs. 1.14 Bn in FY22
- Sterling Holidays registered Highest EBITDA & PBT since inception: EBITDA at Rs. 1.1 Bn for FY23; PBT at Rs. 659 Mn Vs Rs. 436 Mn in FY22