Travel services provider Thomas Cook India Group has finalised the acquisition of a significant part of Switzerland-based Kuoni’s global destination management specialists. The acquisition is seen as a part of its growth strategy with growth in Indians outbound travel plans.
Destination Management Specialists are local experts with offices in the holiday destinations themselves.
The price of the deal is 250 million Rands and the valuation is about 5 times profit before tax and has been funded entirely from Thomas Cook’s internal accruals, according to a person aware of the development.
“With this acquisition, we effectively go from being an entirely India-focused business with a business in Hong Kong to a leading Asian travel business with footprint across 22 countries — from Australia, South east Asia, China, South Africa and Eastern Africa, middle east and north American continent,” said Madhavan Menon, Chairman and Managing Director Thomas Cook India Group.
Prior to this acquisition, the group had a network spanning four countries — India, Sri Lanka, Mauritius and Hong Kong.
“Majority revenues will still come from India but we are diversifying more. All the acquisitions bring European and American tourists and represent a higher margin for us,” Menon said.
He added that holidays are becoming an integral part of people’s life and more middle-class people are doing a combination of domestic and international travel.
“Indian people are taking at least one international trip every year… We are also seeing average spends on travel by Indians is increasing. The value per transaction has increased from R 24000” Menon said.
Post this acquisition, Thomas Cook now has 6,500 employees and the business will bring in additional revenues of Rs 1,000 crore and enhance the bottom-line by nearly 60 million Rands, Menon said.
Further, Thomas Cook has seen a 26 percent rise in its bookings online and 40 percent growth in passenger booking through holiday packages seen through tie-up with banks.
The travel firm has three verticals — foreign exchange which is India-focused, tour operating which is with SOTC and a Hong Kong partner and hospitality services such as visa, passport and insurance.