A stronger online presence for Thomas Cook would be a “counterweight” to the likes of Expedia, said a restructuring expert, as boss Harriet Green revealed the travel giant's strategy for the future.
Thomas Cook has unveiled its long-awaited plans for the business, involving selling non-core assets to raise up to £150 million, and said its new growth strategy focused on elements such as web innovation and an “integrated IT platform”.
Commenting on the news, Graeme Smith, partner at advisory and restructuring firm Zolfo Cooper, said: “A stronger online Thomas Cook will be a counterweight to the online travel agents (OTAs) such as Expedia and Hotels.com.
“More competition may help hotels by driving down OTA booking fees, which have been able to grow to up to 30% of the room rate, but this could take time.
“Rather than wait for this, hoteliers need to take greater control of their room sales by growing direct bookings and teaming up with companies and tour operators directly.”
In a strategy document released this morning Cook said that it has taken steps to reduce inter-channel competition and has “substantially strengthened the omni-channel approach”.
Stating its intention to create a “single customer gateway” the document said: “This will enable a consistent, personalised customer experience with access to a full range of products, services and personal recommendations across all channels allowing deeper, more insightful customer relationships which go beyond the booking transaction.”
Cook will consolidate its customer-facing website brands to just one in Germany and three in the UK and said it will increase investment in search optimisation and customer engagement tools.
“A key propriety of the group is to become the leading online tour operator with a digital platform that will host a full portfolio of digital products and services. We aspire to have the highest share of bookings online for a major tour operator.”
Cook set “targets per segment” by the end of the 2015 financial year at over 55% in the UK, 12% in Europe (30% by 2016/17), West/East over 40% and northern Europe and airlines by over 75%.
Cook said a non-core disposal programme is underway with the opportunity to realise gross proceeds of £100 million to £150 million. This is likely to include operators such as ski specialist Nielson and Gold Medal, the aggregator and luxury tour operator.
Smith said: “The refinancing deal is good news for Thomas Cook. Due to its scale, brand and underlying profitability, the travel company will have been able to consider a wide range of financing options.
“The restructuring process will have considered all of these and the current structure would appear to demonstrate the support of the company’s financiers in the company’s business plan.”
Smith continued: “Thomas Cook’s retreat from the high street is sad but not unexpected given the dominance of the internet now in the mainstream travel market. Other areas of the travel sector are growing - particularly those aimed at over 50s, students and specialist niche experiences.
“Firms associated with these areas such as Saga, STA Travel and Trailfinders have the potential to expand their high street presence but do not have the scale to fill the Thomas Cook-shaped hole.”
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