Thomas Cook Group plc: Company Strategy & Performance Analysis
Thomas Cook Group plc (Thomas Cook) is one of the leading leisure travel groups in the world. It offers a wide range of travel and tourism services through a network of owned and franchised travel stores to more than 20 million customers annually. Several of its major brands include Thomas Cook, Ving, Tjareborg, Spies, Condor, Airtours, Neckermann, Bucher, Air Marin, Sentido, Oger Tours, Bucher Last Minute, Cresta, and Hotels4u, among others. The company has operations in various source markets including the UK, Ireland, Germany, France, Denmark, Finland, Belgium, Russia, Switzerland, and the Netherlands. Thomas Cook’s headquarters are in London, the UK.
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A strong fleet network enables Thomas Cook to cater to a large customer base
The company maintains a diversified fleet strategy comprising a variety of aircraft that provide flexibility as per changing conditions. Thomas Cook operates a fleet of 94 aircraft on long-haul, short haul, and medium-haul routes. The large fleet size enabled the company to cater to 19.0 million customers in 2016. Moreover, the number of seat only and third party tour operator passengers increased at a CAGR of 5.9%, from 6.9 million in 2013 to 8.2 million in 2016, whilst the number of long haul passengers increased from 2.3 million in 2013 to 3.0 million in 2016, reflecting a CAGR of 9.3%.
Technology initiatives to drive Thomas Cook’s growth
Thomas Cook regularly undertakes various technology initiatives to accelerate its growth. In June 2017, Thomas Cook Northern Europe implemented ASSA ABLOY Hospitality Mobile Access at its Ocean Beach Club on the Greek island of Crete. This innovative technology enables users to access guest rooms using their smartphones, and is expected to significantly improve guests’ experiences.
Intense competition among operators could lead to a price war
Thomas Cook operates in the leisure travel industry, which is characterized by highly similar service offerings. The company has been facing intense competition from airline operators and travel firms, which may compel it to alter its pricing strategy or shift to other markets to remain competitive. In February 2017, hoteliers in Spanish islands raised their prices from 6.0% to 8.0% in response to rising demand for destinations such as Majorca and the Canary Islands. As a result, Thomas Cook hiked the price of its summer package holidays by 9.0% to a gain significant profit margin.