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Good Times Ahoy!

Thomas Cook India saw a 18 per cent growth in its topline even during tough economic times like these…

“Families who have decided on going on a holiday will definitely go on a holiday” commented Madhavan Menon, MD, Thomas Cook India (TCI) in a television interview recently. Menon knows what he is talking about. Even in economically tough times like these his travel services company saw its topline grow by 18 per cent during H1CY12. TCI is not alone in witnessing this strong trend. Its peer Cox and Kings too has reported a similarly strong growth this year. Travel services account for 77 per cent of TCI’s revenues.

Outbound tourism in India has been growing at around 1.5 times the national GDP rate or near 10 per cent annually. The current economic environment notwithstanding, a higher proportion of the internet-hooked and young population is taking off for some good times.

TCI is in process of moving from its traditional “brick and mortar” business model to a hybrid model that utilises both the traditional and the internet routes. Think of it as something between your neighbourhood travel services agent and that of other online travel portals such as makemytrip.com. TCI should find a place between these two ends. Margins should also improve with this model as costs are slashed. An added benefit of this model is that a company’s reach expands manifold as it doesn’t have to be present in every customer location. Anyone who has booked tickets at any of the online travel sites knows the convenience of such portals.

The prospects of outbound travel remain strong unless there is a severe shock to the economy. If such an event doesn’t occur anytime soon, travel could figure into people’s discretionary plans. Hold on.