Owned by Lufthansa German airlines and a big German retail conglomerate, the Thomas Cook of today is a much changed company primarily extending travel and financial services to European consumers – but it has retained a strong image in the local market and even a few employees who remember working in Beirut in 1984. EXECUTIVE talked to Thomas Doering, senior vice president for corporate development, about the company’s objectives in reopening their offices.
You want to operate inbound and outbound travel and related services in Lebanon. What is the first item on your agenda?
We have a two-phased approach. The first phase is to open offices and establish our infrastructure in Lebanon. This is what we have just done. With this, we want to establish ourselves as a travel company to the local people. This is our first objective. In phase two, we like to invest to get people into Lebanon.
How important is the Middle East region in the business of Thomas Cook?
The Middle East is a region that we believe in, that we did our studies on, and that we now have decided to invest in. It is in our strategy as an expansion region, but it is quite small in terms of numbers.
What is your timeline for growing the business in Lebanon and opening new offices?
The way we do business is to have a proper business running before taking the next step. But if you ask me, I would open an office in the [Beirut International] airport tomorrow. Other places would follow as we learn which places are the best to go.
How big of an impact do you expect your operation to make vis-à-vis the established Lebanese competition of travel agencies and Beirut-based operators?
When Thomas Cook comes to a country it tries to bring all the best things from the world to that country, meaning that we can bring talent, technology, contracts, relationships, network and the power of this huge group. In corporate travel, for example, we will not be the one to take the smallest percentage as a fee. But with our technology and search technology, we might be able to offer you a ticket that might be cheaper by $500 on a $3,000 ticket, and that makes much more sense to our customers.
You obviously have done your studies
Yes we have, and we want to have a significant market share. Our aim is to be number one or two; normally we aim to be number one.
Is that in corporate travel?
Corporate and leisure go hand in hand. The same customers that go on business trips invest in their own leisure time.
How large do you assess the corporate travel market in Lebanon to be?
I do not think that anyone knows haw big that [cumulative corporate travel] budget is for all Lebanon – but it is significant because the number of airline tickets being sold here is for instance as big as in Egypt. The potential is there.
Are you seeking larger firms as your clients, or are you also approaching small and medium enterprises?
There is no minimum size. The relationship would be different with a small company, because smaller companies tend to come and buy a ticket on a case-by-case occasion. With a bigger customer, we might have a longer-term contract, and take over their whole travel budget, its administration, databases, etc. That is a very different relationship. But we are interested in both customers.
In your summer 2004 program, you do not yet offer Lebanon as destination. When can we expect to see Beirut listed in your catalogues?
As soon as possible. Our plan is to test the product in the market right after we come back. But it will need education of the people. We will need to go out and tell people what fantastic country Lebanon is. We need to tell people that it is safe to travel here and we need to tell people that this is three hours from Europe.
Will you offer Lebanon in package tours including several countries or focus on developing it as solo destination?
We always had cultural tours where you go and visit two or three of these countries. This business will be there and we will continue to do it. But I see the bigger chance for this market to position itself to the short-break passengers who just want to go on their own to a city and explore it. My vision is that we can go out and position Beirut as a product with the sophisticated traveler. We need to grab the niche between city and charter seven-to-14 day beach holidays. And if we can position ourselves there in the upper market, then we can offer culture, fantastic city, hospitality, good hotels, beach, and this fantastic [Lebanese] lifestyle around it.
How many of the 12 million annual passengers with Thomas Cook can be categorized as up market?
By far the biggest chunk of our business will be from charter package passengers, because this is where both our German and our UK business come from. But do we understand the trend of the individual traveler? Yes, we do. 50% of demand is not for charter package and this is the growing part. This is why these things become interesting for us.
Thomas Cook holds stakes in hotels and owns airplanes. Are you looking at investing into hotels here?
We go into hotels when we feel that we need to improve the product quality or secure product availability. This is something that comes up when we have very big volumes. Then we want to have some own assets. I think that is the answer to your question.
How about offering charter flights to Lebanon?
What I have just said is equally true for charters. Charter is the possibility to offer secured capacity with self-managed quality to a destination, but it only makes sense when you have big volumes.
How much are you prepared to invest into marketing a destination such as Lebanon to your customer base?
A lot at the right time. Our investment is by putting the destination into brochures, putting it into windows, putting it out to the public. Our window to the public is literally millions of publications – catalogues – and 4,000 own and many more associated travel agencies where these destinations appear in the window. I wouldn’t want to qualify that marketing power in terms of dollars but when is the right time to do it? It is coming slowly and it needs to be equal to the upturn in demand. There is no point in putting marketing dollars at a customer base that doesn’t understand the concept.