Travel services and forex provider Thomas Cook India is seeing promising trends in the forward bookings for December and January, both for inbound as well as outbound travel. This rebound has come after a period of uncertainty following the India-Pakistan border tensions and Israel-Iran conflict, along with the tariff levies by the US administration, which had marginally dented the September quarter profitability.
Speaking exclusively to Moneycontrol, Debasis Nandy, President and Group CFO said that the trend has been helped by the recent GST rate cuts as well as subdued inflation trajectory.
Edited excerpts.
How would you assess the September quarter?
The first quarter was an uncertain period, and we continued to see a fallout of that in the second quarter. The geopolitical disruption impacted overall sentiments. Our performance was a bit muted but the fact that we could stand our ground and retain our profitability shows strength of the company.
What was the drop in India in-bound travel?
The travel business is based on forward bookings which happen 3-4 months in advance, and is based on the environment at the time of the booking and not on the environment at the time of travel. The inbound India business dropped by 10%, that’s primarily because these bookings were coming in May when we had the Indo-Pak tension and Israel-Iran conflict.
What was the pressure on your market share?
We managed to grow our retail business which includes education and holidays, but overall, if you look at the LRS data that the RBI publishes, foreign exchange remittances have fallen very sharply. Despite this, we have managed to grow by growing our market share.
What disruption to business was caused by the US tariffs?
Foreign exchange remittances did suffer. We have an entity in the US which does inbound business, or customers who primarily come from Europe. July-September is a peak period for travel in Europe, and we saw a decline in the number of customers. While our businesses grew elsewhere, we did see very muted business of Indians going to the US.
Could you say a bit more on the forex business?
The overseas education remittances grew by 9% and what is interesting is the increase in digital payments. WhatsApp (payment) transactions grew because more people are now using that platform. We integrated our forex cards with Google Pay, which allows you to embed our card into it and pay from there. Forex card is now available in 10 minutes on Blinkit.
How did Sterling Hotels perform?
It was a muted quarter for Sterling. Travel was impacted by heavy rains in most parts of the country, especially in Himachal Pradesh and Uttarakhand. Many resorts were non-operational followed by cancellations of bookings by travellers. Some or our resorts like those in Rajasthan are getting business from weddings. This year, there are very few auspicious days and most of them are in December quarter. We have opened seven resorts this year and it typically takes time to establish itself.
How strong are the advance bookings?
We are seeing good trend in bookings. There is lots of optimism thanks to the GST rate cut and also with retail inflation being at all-time low. These savings do get translated to travel. December is showing good outbound travel trends to Asia and to Europe also. We expect this to translate into a good quarter for us. Direct flights have started to China from India and the normalization of relations with China is playing out very well for us.
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