Many Indians view travel as a necessity. Some even include it among financial goals. Travel operators and companies have identified this opportunity and are coming up with innovative products. Thomas Cook (India) Ltd is one such travel company. Over the past year, it has launched various retail-focussed products, including foreign exchange and holiday apps, prepaid currency card, and a savings account. Abraham Alapatt, president and group head-marketing, service quality, financial services and innovation, Thomas Cook India, talks about how technology is shaping the travel sector and what is changing the mindset of the Indian traveller.
What travel trends do you see among Indian travellers?
The Indian consumer increasingly views travel as a necessity, often opting for 2-3 short breaks along with a long leisurely vacation per year. Media exposure and aggressive marketing have also helped create awareness and need. With the many public holidays, the Indian consumer is converting long or extended weekends into quick holiday getaways. This bodes well for the travel industry as a whole. Further, the impressive growth in outbound Indian travellers has made India one of the largest outbound travel markets globally. The World Travel and Tourism Council predicts that the total expenditure on outbound travel in India will touch Rs.1.06 trillion by 2024, up from Rs.750 billion in 2013.
Social media and its influence via direct and viral reach, especially for a high involvement and oft discussed and shared category like holidays, is immense. As prospective customers spend more time online, and with Internet reach among mass customers in India growing at rates of 26% year-on-year, there is big potential to be uncovered.
Thomas Cook has launched many retail-centric products in the past one year. Do you see potential in this space?
The improved economic trajectory, exponential growth in India’s middle class and discretionary spends is fuelling the holiday opportunity. Added to this is the ‘brag value’ of outbound vacations and the impact of social media. We are constantly exploring options that focus on a tech savvy young India.
The company has tied up with various banks to launch a holiday savings account. Are you seeing traction in this product?
Indian households have an inherent tendency to save. Keeping this in mind, we approached banks with this product. IndusInd Bank Ltd was the first bank that we tied up with for the savings account, in 2014, and since then we have received 8,000 queries from customers of the bank. At present, with various banks, we have 18,000 accounts that are at various stages of the cycle.
We started with a few domestic destinations, and then moved to international destinations in Asia. In 2015, we included Europe. In total, we have 15 destinations.
How do you see technology shaping the way people plan their holidays?
India is set to become one the biggest smartphone markets in the world. And with holidays featuring high on the Indian digital wish-list, we saw strong value in this emerging ‘m-Holiday market’. Today’s Indian mobile consumer falls into two key categories: the m-booker and the m-searcher. Our holiday app is designed to capture both.
Technology and a young demography is changing the dynamics of travel. Younger people are more comfortable carrying out transactions online and on their smartphones. Our app has, in fact, grown 100% in terms of usage and by over 50% in downloads month-on-month since its launch in November last year. More than 40% of our foreign exchange transactions are completed directly from the app.
Can more be expected in the area of foreign exchange?
We are constantly evaluating opportunities in the remittances space. The foreign exchange business launched quite a few products including the Online Forex Store and Forex on Mobile, or forex via SMS or tweet. Our data revealed that though prepaid cards offer strong security benefits, the high cross currency conversion charges (typically 3-4%) was a deterrent. So, we launched the One Currency Card last year. It allows you to load a single currency (US dollar) and comes with zero cross currency conversion charges, across the world.
For inward remittance, we partnered with ItzCash, a payment processor, to extend our outreach to the rapidly growing but unbanked inward remittance market, by offering remittance services (Xpress Money and MoneyGram) across our network touch points in India.
What trends do you foresee for this summer holiday season?
This summer we are likely to see a healthy mix of short and long hauls with easy access options such as Singapore, Dubai, Sri Lanka, Thailand, Bali, Malaysia and Hong Kong-Macau coupled with favourites such as the US, Canada, Europe and New Zealand-Australia. There are newer destinations as well that Indians are looking at, including Korea, Israel, Flanders (in Belgium), and the Philippines. Experiential travel is what Indian traveller is keenly looking at. The traditional tick-box see-all-you-can package no longer finds favour. Engaging experiences are in high demand now.
Domestically, drive-down destinations are increasingly popular.
In fact, according to our internal research, with average advance bookings of one month to a week prior, our Web portal has seen a healthy growth of 45% in 2016 compared to the same period in 2015.