Air tickets fell, but hotel rooms were insufficient to maintain high travel costs: Thomas Cook

While international air tickets are flat compared to last year, the higher euro (5% compared to the rupee in the past year) could undermine travel demand in Europe, Ayer said. However, the relative stability of the US dollar to the rupee (USD has increased by 1.9% over the past year) means that Indians have similar levels of vacation in the United States as last year.

European dilemma

The sharp rise in the euro is expected to hit international outbound tourism, especially this summer, as Europe is often a large part of the holiday portfolio of many travel companies, including Thomas Cook India. Europe contributed 41% of its international travel business during its peak summer season.

“Even a 3-5% change in price has pushed up the overall holiday prices,” Ayer said. That said, he expects the overall outbound tourism industry to grow by 4-5% last year, led by the United States and Europe, as well as various excursion industries across India.

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He said that as average domestic air tickets fell 4% year-on-year in the fiscal year, consumers may get better travel deals – banned holidays and power outage dates. The power outage date is the date when travel rewards and other special discounts and promotions are available. These dates are usually part of the main holidays or other peak travel seasons.

But the pressure on domestic hotel prices may continue, Al said. “So, domestic holidays, average ticketing and holiday spending will not change this year,” he added.

According to independent hotel consultation activities, hotel room rates in India increased by 70% in 2023 and 2024. Mint According to reports in October, the average nightly exchange rate of five-star luxury hotels rose by 20.2% to ₹FY24 was 15,655, while standard five-star hotels grew 19.8% ₹8,756.

pahalgam effect

Airlines and hotels have been cancelled in the past few weeks due to the Pahalgam attack and the ensuing Indian-Pakistan conflict. Until three weeks ago, Thomas Cook saw high profile growth in his travel and travel business in fiscal 26, but since the attack, it has seen “a certain degree of softness” with its holiday bookings.

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“Our business effect is seen in our business. We don’t see a complete cancellation, but a requirement for a change in destination. We are now seeing some normal people back in the market. Bad news is behind us. Domestic and international holiday porfolios will also grow between 15-18% in fiscal 25.”

Tariffs put corporate travel in trouble

However, changes in tariffs have an impact on the company’s B2B or company’s business. Companies, especially IT and ITES companies, are still evaluating their employees’ travel budgets. “The full impact of tariffs is unclear because there are disruptions at present. We will learn more once the behavior of export markets and how IT companies will be affected,” he said.

This segment accounts for 40-42% of the company’s corporate travel portfolio. Over the entire year, Thomas Cook still wants double-digit growth in the company and conference, incentives, conference and exhibition (mouse) businesses.

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He said the company’s various businesses grew at 12-20% in fiscal 25. “We maintained profits while increasing the number.” The company’s travel and travel-related services business grew 15% and the contributions from consumers and B2B arenas are also contributing. The consumer business grew significantly after the outbound and domestic holidays, which grew 20%. He said the number of inbound travel increased by 25%.

Greater tax burden

The company’s operating revenue increased by 11.5%, reaching ₹813.95 billion in fiscal year 255 ₹7.293 million in fiscal year 24. However, profits fell by 4.7%. ₹2.583 million ₹240 million in fiscal year 2.4 billion.

Al said some businesses that caused losses in FY24 made profits in FY25, which increased the tax burden on the company. He added: “Thomas Cook contributed about 50% of the group’s profits and continues to be at the old tax rate.

The company has added 13 new resorts to its portfolio in fiscal 25, and Iyer hopes they can reach their full potential in the current fiscal year and contribute more to the business.