BSE:500413 | NSE:THOMASCOOKEQ | 58888:tcook | IND:Travel Agen. / Tourism Deve. / Amusement Park / Catering | ISIN code:INE332A01027 | SECT:Tourism & Hospitality
The Financial Year ended March 31, 2018 has been a special year for your Company.
In line with our ambition of being a one-stop shop catering to all the needs of the Indian Traveller, we have embarked on a strategy to use technology as an enabler to fulfill their aspirations and ambitions. We hope to make the experience content rich and seamless. This strategy will help us in meeting the clear opportunity of the strong expected growth in retail demand and the aspirations of younger, Gen Y customers, while addressing the expectations of our existing customer base.
India''s economy grew at its fastest in seven quarters in the January-March 2018 period, pointing to a persistent revival trend. Gross domestic product rose 7.7% in the fourth quarter, retaining India''s ranking as the world''s fastest-growing major economy, outpacing China by nearly a percentage point. This despite the teething challenges of GST implementation.
The price per barrel of Brent Crude rose from USD 46.37 in June 2017 to USD 76.98 in May 2018. A combination of elevated crude oil prices and a weak Indian rupee, which was trading at a 5-year low in 2018, could adversely impact India''s current account position, and inflation rates.
We are also witnessing growing tensions and trade wars in the global economy that could potentially impact the Indian economy as well, causing increased volatility in global markets in the near term.
Despite the initial teething problems relating to the GST rollout, we remain bullish about the long-term positive impact that it will offer your Company and the organized travel sector at large.
These positive trends in the global and Indian economy also manifested in the Travel and Tourism Industry. Globally, for the 6th year in a row, the travel industry outpaced global economic growth in 2017.
According to a 2018 economic impact report by the World Travel & Tourism Council (WTTC), India is likely to become the third-largest tourism economy in the next 10 years.
The total contribution by the Travel and Tourism Industry to India''s GDP is expected to increase from Rs. 1,524 Lakh Crore (USD 234.03 Bn) in 2017 to Rs. 3,205 Lakh Crore (USD 492.21 Bn) in 2028.
The Government''s decision to allow 100% FDI in the sector under the automatic route, is expected to contribute to the sustained growth in tourism in the long-term as it will attract investment in the Hospitality sector and related infrastructure areas like airports, roads etc.
Improved regional air connectivity has further spurred the growth momentum of the industry. Strategic tourism initiatives such as the Pilgrimage Rejuvenation and Spirituality Augmentation Drive (PRASAD) also create exciting opportunities on the Domestic tourism front.
This Government''s contribution to the development of Tourism has been unparalleled in the history of Independent India. Its consistent moves to ease entry visa restrictions for many other nationalities resulted in similar easing of visa restrictions for Indian travellers by many other Governments across the world.
The prevailing macro environment has opened up new vistas of growth for our Company, with our four distinct verticals namely: Travel Services, Travel Related Foreign Exchange, Destination Management Services (DMS) and Portfolio Investments such as Sterling Holiday Resorts Ltd. -
structured to maximize potential across these large and growing opportunities.
Acquisitions & Expansion
To further strengthen your Company''s ability to scale growth in the dynamically evolving travel landscape, we embarked on a series of acquisitions during the year. These were the acquisitions of Kuoni''s Global Destination Management network across 17 countries and Tata Capital''s erstwhile Travel and Forex businesses in India, which were then rebranded as TC Travel & TC Forex respectively.
The acquisition of Kuoni''s Global Destination Management network marked an important milestone in our journey, creating a now significant global footprint for our Group, across 24 countries & 4 continents. We now are a team of over 6,600 travel professionals from 59 nationalities, operating from offices across 24 countries, making your Company one of the largest travel service provider networks headquartered in the Asia-Pacific region.
In India, we are the leading Integrated Travel Services with a network of over 540 service locations across 104 locations in India and the largest player across Outbound, Inbound, Business Travel, MICE and Foreign Exchange Services.
Through our acquisition strategy we have diversified our business across multiple businesses, but also across multiple regions of the world. Your Company has become the only Multinational Travel company in India.
Your Company continues to be open to new investment opportunities in related and adjacent areas and will evaluate these as and when they arise.
Technology and Customer focus
With more than 65% of customers starting their travel researching online and expecting real/near real-time fulfillment, your Company is focusing on enhancing our digital capabilities in line with the expectations of younger, digital native customers. Our thrust on innovation & technology saw increased investments in both customer-facing and back-end technology to improve customer experience.
We launched a unique FIT technology platform called Voyager - to equip our sales team to build and book customized holidays that are bookable on the go. We expect this platform to reduce the turnaround time for an FIT enquiry to make it quick and seamless.
Our advanced web technology platform Astra was deployed across thomascook.in and sotc.in. Astra offers enhanced features and functionalities for both these integrated e-commerce portals, across our lines of business and is designed to work seamlessly across both mobile and desktop devices.
In line with our Customer First focus - your Company launched a unique self service module on the Thomas cook. in mobile app as well as a dedicated Customer service app - Engage - for SOTC. These apps will empower customers, enabling them to track their booking status, get updates, make changes in their bookings etc. in real time. Similar self service capabilities were launched for Business Travel clients as well as our Borderless Prepaid Card customers.
Your Company is also actively engaged in deploying technology enhancements using robotics, & machine learning to drive volumes and improve business efficiencies. Similar efforts are being invested in the areas of analytics and customer experience to improve marketing effectiveness and improved customer satisfaction
Initiatives to drive efficiency
The year under review also saw your Company undertake several initiatives to boost process efficiencies.
One such critical initiative was the Shared Services Centre - a unique initiative aimed at improving productivity and cost saving via a common resource pool to deliver standardized and automated processes for all our group companies, across key functions including Finance, IT, HR and Admin.
Two other initiatives that your Company undertook to make growth and profitability sustainable, were Zero-Based Budgeting (ZBB) for cost optimization and Zero-Based Organization (ZBO) for employee productivity optimization. These have delivered significant learning and benefits for the enterprise.
Another initiative that your Company embarked on during the year was a Sales Analytics project that assists us in targeting customers more effectively and to improve our sales and marketing efficiency. I am pleased to report that we have already started seeing the benefits of this programme in our sales numbers.
All of the initiatives and measures described have enabled your Company to deliver strong financial performance for the year:
The Company declared a Profit Before Tax of Rs. 5.38 Bn at a standalone basis for FY 2017-18. This included a net gain of Rs. 5.35 Bn, largely arising out of the stake sale of 5.42% in Ouess Corp. Ltd, which has been deconsolidated effective March 1, 2018.
What is notable, however, is that even excluding the One-time Offer for Sale (OFS) gain and on a comparable basis, the PBT of the Group, grew by 45% in FY 2017-18 over FY 2016-17.
The Board of the Company, had at its meeting held on 23 April, 2018 approved a corporate restructuring exercise aimed at simplifying the structure of the holdings, streamlining businesses and resources, ensuring focused management, consolidating real estate and brands acquired through inorganic growth and eliminating cross holdings. Pursuant to the composite scheme, Thomas Cook (India) Limited shareholders will be the beneficiaries of Ouess Shares. This exercise is expected to conclude by March 2019 subject to regulatory approvals.
Your Company was instrumental in setting up the Fairfax India Charitable Foundation (FICF) and has embarked on a Dialysis Initiative aimed at enhancing sustainable, affordable dialysis access in remote areas of the country. FICF is now proud to be associated with the Pradhan Mantri National Dialysis Program (PMNDP) reaching under a Public Private Partnership (PPP) scheme.
Under PMNDP, FICF has as of March 31st, 2018, donated 90 dialysis machines across Nagaland, Arunachal Pradesh, Odisha, Jammu & Kashmir & Chhattisgarh. I am also glad to report that cumulatively, as of end July 2018, FICF has installed 172 dialysis machines across 15 states, enabled over 25,000 dialysis sessions.
Going forward, FICF is committed to installing 1,000 dialysis machines across 200 dialysis centres, together capable of offering 9,00,000 dialysis annually. These will be focused on serving India''s poor and located in remote areas, with no/limited dialysis infrastructure.
We believe that the Ayushman Bharat scheme covers the area of Dialysis and facilitate greater penetration for the dialysis centres that will have the machines installed by us.
Against the backdrop of the enormous opportunity that the travel & tourism sector represents in the coming years, the leadership of your Company is focused on two broad areas going forward:
1) Unparalleled Customer Delight across a seamless Omni channel model
2) Sustainable growth and profitability via state-of-the-art technology, efficiencies of scale & best-in-class processes.
I take this opportunity to thank the Board of Directors, leadership teams across the Group, as well as every customer, employee, partner, investor and stakeholder for your unstinting support.
I am confident that we shall continue to enjoy this going forward and together ensure strong and sustainable growth in the years to come.
Chairman & Managing Director,
Thomas Cook (India) Ltd.
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