CEO: “We’re very excited about Russia; it’s already a huge market”
Thomas Cook CEO Manny Fontenla-Novoa has told a UK newspaper that the tour operator is planning to step into the Russian and Chinese markets. A move into India has already been announced and a move into Russia was revealed in recent days. Thomas Cook is aggressively pushing east. The move to Russia involves forming a bold joint venture with the Soviet-era giant travel agency Intourist, buying 50.1% of the company for €34 million. “We’re very excited about Russia,” he said in an interview.
“It’s already a huge market. Six million Russians go on holiday every year and the estimates for annual growth range from 12% to 20%. Turkey and Egypt are very important destinations for Russians so they play to our strengths, and some people say that in 10 years’ time the Russian market could be the biggest in Europe. So we’re entering it at the right time.” He explained that the strategy is a three-pronged attack.
“Our strategy has been to go into India, Russia and China. We’ve done India. We’re doing Russia this year and we’ll probably look to do something in China in 2012. It will probably be a joint venture and an entry similar to the Russian one.” The tour operator chief said that in terms of destinations Turkey continues to outperform virtually every other destination, including long-term rivals Spain and Greece.
He commented that it was especially hotels in Turkey that have been able to exploit the current demand for all-inclusive holidays, which can include “everything from ice creams to drinks and meals”, and these are extremely popular due to the economic climate. “Customers that go on all-inclusive holidays typically spend 99% of their time in the actual hotel and grounds and you’ve got to be able to cater for that, and Turkey does that better than anywhere else.”
All-inclusive holidays now account for around 50% of Thomas Cook’s packages from the UK market – double the percentage just three years ago. Most Russians’ first choice for a holiday break is also Turkey. Meanwhile, the UK market is returning, Fontenla-Novoa confirmed, but not as strongly as France and Germany. The 56-year-old CEO first arrived in the UK from Spain at the age of 11, without speaking a word of English. He travelled there with four brothers and sisters and his mother, who found work as a hotel chambermaid.