How Thomas Cook uses tours to help its hotels

Mediterranean Resort & Hotel Real Estate Forum

Anthony Leung, head of corporate finance and treasury at Thomas Cook, is responsible for group treasury, M&A, strategic partnerships and ensuring overall delivery of the Group’s strategy. Since joining Thomas Cook, Leung has overseen the creation of the  hotel investment platform with LMEY to help develop the company's own branded hotel portfolio.

At the 2018 Mediterranean Resort & Hotel Real Estate Forum, Oct. 17-19 in Athens, Leung will examine how a tour operator adapts to new market trends by launching new resort brands and investing in hotel properties during the From the Tour Operator's Perspective interview. Ahead of the conference, he shared his insights on the several investment trends, including development in the Eastern Mediterranean and competition from the OTAs.

1. How would you characterize the overall state of resort investment and development in the Mediterranean region?

At Thomas Cook, we’re seeing two interesting trends: a shift back to the Eastern Mediterranean countries including Turkey and Tunisia, and a slowdown in Spanish locations especially in the Balearics.

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Our most exciting projects are in Greece and Turkey, where hoteliers recognize the importance of investing in the proposition to keep their hotels modern, relevant and meeting the expectations of how our customers want to holiday. Our work on introducing brands such as Casa Cook and most recently Cook’s Club in Greece is down to relationships with hotel partners who are willing to take risks with us.

2. What is the main challenge facing the traditional tour operators?

The main challenge we face—like everyone in the holiday industry—is continuing to stay relevant to holidaymakers. It’s no longer sufficient to just put a generic seat and bed together.  People’s choices now are much greater and more than 50 years of mass market leisure travel means generations have been brought up holidaying around the Mediterranean and have no fear about booking non-traditional package holidays.

We’ve focused our efforts on personalisation by launching initiatives in our [own brand] hotels such as Choose Your Room and Choose Your Favourite Sunbed that allow guests to tailor their holiday experience to suit their needs. We also launched Casa Cook to attract a new type of customer who is looking for a more boutique lifestyle hotel—and it worked, as more than three-quarters of our guests at Casa Cook were new to us last year. In June, we opened Cook’s Club, and we aim to have 10-15 Cook’s Club hotels by next summer.

3. How are you working to engender customer loyalty at Thomas Cook?

Anthony Leung
Anthony Leung
Photo credit: Thomas Cook

For the past few years we’ve used the measure of net promoter score as the benchmark of quality and customer satisfaction. That strategy is paying off with new customers and repeat customers up 12 percent and 6 percent respectively over the past year. We believe that innovations such as new own-brand hotels as well as Choose Your Room and Choose Your Favourite Sunbed give us the lead over other holiday companies. 

4. Who are Thomas Cook's greatest competitors—the hotel operators or the OTAs?

The leisure travel market changes rapidly and the rise of OTAs has added additional choice to holidaymakers—especially opening up new accommodation options and the ability to choose locations that might not previously have been accessible. We offer a different proposition to OTAs and provide guests the reassurance of protection for their holiday spend as well as in-destination support. The continued rise of package holidays shows that we are in a strong position to attract even more customers.

5. How hard is it to find suitable sites to buy in the developed markets?

We are seeking established hotels in prime sun-and-beach locations that we can refurbish to become one of our eight hotel brands. Because of our many years of long established relationships with hoteliers and having an active team on the ground in our key destinations we are in advanced talks regarding several sites at the moment. 

Having the backing of a tour operator means we already know we can fill our own brand hotels harnessing the sales and marketing scale plus our partnership with Expedia as a company will open up new opportunities for distribution. Coupled with our hotel management expertise and access to capital with the fund we are able to make strong offers to our partners. Our growing presence in China also positions us to capture new customers for these properties.

6. Where, for you, is the most exciting emerging market? 

Our relationships in Turkey are opening up some exciting opportunities for our own-brand hotels. We can see the enthusiasm and interest to open innovative and premium hotels that offer top-quality accommodation for our customers. We’re seeing strong growth this year for the destination after a few low years and would want to continue to see further developments that entice more customers to enjoy holidays in Turkey.  Although Spain and Greece will continue to provide the core of the opportunities.

7. Is it important to have one strong brand within a portfolio, and which one leads the way for Thomas Cook? 

We have eight hotel brands that offer something different for different types of customer. We can see with Casa Cook—and most recently Cook’s Club—that we can attract new people to Thomas Cook and package holidays but also our longest-standing brand Sunwing Family Resorts are some of the most successful hotels in the Mediterranean. We continue to adapt and evolve our designs and offering to reflect changing customer tastes – for example, this year we unveiled a vegan menu in our Sunwing and Sunprime hotels as well as extending our swimming classes in Sunwing to offer guests the chance to swim like a mermaid. 

8. Do you see more independent hotels joining Thomas Cook?

We want to continue growing our own-brand hotel portfolio adding quality hotels with partners who want to innovate and grow with us. We are also rigorous in deflagging under-performing hotels and so we are always looking for new partners to maintain our portfolio of around 190 hotels. We work with groups and individual hoteliers—the key is their attitude to continual investment and innovation.

9. How are you working to address overtourism? 

We recognize the importance of this particularly in well-established markets. In addition to implementing things like Travelife in our own-brand hotels that acts as a supply-chain management program encouraging sustainable investment in local communities, we are also opening up new destinations. In Greece alone in the last two years we have added 34 new routes and introduced four new destinations that enables our guests to explore new areas of the country. On Crete, for example, we started flying to Sitia that enables us to spread our guests from Heraklion and opens up new corners of the island. We aim to replicate that across other airports and across more of our markets.