Mr. Peter Kerkar, Director, Cox and Kings Ltd. He is the promoter of Cox and Kings. He is a graduate in arts (B.A.) with distinction in Economics and Anthropology from Stanford University, USA. He joined Cox & Kings Ltd. (known as Cox and Kings India Ltd. earlier) in October of 1986 in the capacity of General Manager. Under his tenure, Cox & Kings Ltd. expanded its product geographies from India to sell Latin America, Environmental Journeys, Special Interest Tours, Middle East, Africa, Egypt, China and the Far East. Mr. Kerkar is based in the UK and is responsible for overall leadership, strategy, global centralized buying and international growth, as part of which he has been actively involved in the identification of newer opportunities. He was appointed on the Board of Cox and Kings, the first time on November 30, 1993 and since then he continues to be on the Board. Mr. Kerkar’s vision is to make the company a leader in the travel and tourism space not only in India but across the globe.
Cox & Kings Ltd. is one of the oldest travel companies. It is a premium brand in all travel related services, employing over 1,400 professionals headquartered in India. The business can be broadly categorized as Leisure Travel, Corporate Travel, MICE, Trade Fairs, Visa Processing and Foreign Exchange. The company is networked through a mix of branch sales offices, franchised sales shops, General Sales Agents (GSAs), and Preferred Sales Agents (PSAs). The company has 14 branch sales offices located in Mumbai, New Delhi, Chennai, Kolkatta, Bangalore, Hyderabad, Ahmedabad, Jaipur, Kochi, Pune, Nagpur and Goa. The company has also appointed 94 franchisees across 20 states covering 70 cities. Its extensive network of 185 GSAs and PSAs covers all major towns and cities of India. It has subsidiaries in the UK, Germany, Australia, New Zealand, Japan, USA, UAE and Singapore and operates from Moscow (Russia), Maldives and Tahiti through branch offices and Spain, Sweden, New York, Italy, France, South America and South Africa through representative offices. Over the last two years the company has won many awards.
In an exclusive interview with Hemant P. Maradia of IIFL, Mr. Kerkar says, “The travel industry is growing at over 25% year on year and we are way ahead of this figure.”
We are right in the middle of the summer holiday season. Could you tell us how has this season been for Cox and Kings?
The summer season begins in April and extends upto July in North India due to the school holidays. It is the peak tourist season and this period comprises 50% of the total travel for the year.
The travel industry is growing at over 25% year on year and we are way ahead of this figure and this demonstrates our ability to attract customers due to our superior quality of service and attractive products that we have introduced.
What have been the new trends, new locations, etc. this year? Which are the most favoured destinations among the Indian consumers?
We have observed that luxury travel and private van tours are two new trends for this summer. People do not mind splurging between Rs 5 lakh to Rs 50 lakh for a holiday and these big ticket holidays are on the rise. The other trend is to travel on private vans. We have introduced the concept of Private Van Journeys throughout Europe where a group of six adults can travel together in a chauffeur driven van on a road trip at their own pace and luxury. Private Van Journeys are also available across Australia, New Zealand, Africa, China, Egypt, Turkey & Greece.
Destinations such as Philippines have also picked up its national airline starting services between India and Philippines.
In terms of destinations, there is an increase in the demand for Canada, Oman, USA and Europe. Within India, Kashmir has picked up once again. There is an increase in demand for the North East and Eastern India. In the south, Kerala continues to be an all time favourite. In the west beach destinations in Maharashtra and Goa are all time favourites.
Could you give us a break down of trends across Inbound, Outbound and Domestic tourism segments this season?
Inbound travel does not take place during summer. The inbound season begins in October and ends in March.
For outbound, we see first time travelers flocking to Dubai, South East Asia - Malaysia, Thailand, Singapore, Hong Kong and Macau. The more seasoned traveler prefers the cooler climes of Europe and special interest customers traveling to Africa and South America. The luxury segment travels to Australia, New Zealand and also to the USA.
As for domestic travel, there is a rush and every holiday destination is booked and sold out. According to the Ministry of Tourism, Government of India, last year close to 450 million Indians traveled within the country. This itself is an indication on the growth in the travel industry.
However, one negative has been the increase in airfares on both domestic and international sectors due to increase in the fuel surcharge. Fares are up by at least 25% compared to the same period last year.
What are the major driving forces behind the demand for tourism this season?
Increase in disposable income, growth in demand from Tier II and Tier III cities and also the change in attitude towards travel. Every family takes at least one vacation a year to a tourist destination.
Could you provide a break-up of your business in terms of inbound, outbound and domestic travel? How do you see this mix going forward?
We do not break it down into segments but I can state that more than 85% of our India business comes from the leisure space. This space is growing and we feel this will always be our mix.
How do you see competition from the slew of Internet-based travel services?
It is very important to be in the online space and we do believe that both offline and online travel companies can co-exist. In fact, this will help the business grow.
At present, there is not much to distinguish online players from conventional players as we have noticed that many of the online travel companies have also set up brick and mortar outlets in all major metros to service customer requests.
In a sense it defeats the purpose of being online as the overhead costs that they have are similar to conventional companies.
Also, there are a lot of unorganized players in India. How do you tackle that side of the travel and tourism industry?
The travel industry is slowly moving towards a phase of consolidation. We find that many small time travel agents have closed down their businesses and are now franchisees of large operators or act as their agents. They do not have the financial muscle to take on the big players and this is a market reality.
Cox and Kings has expanded its reach by opening up more than 120 franchisees across India in a two-year time frame. Our franchisees are located across 20 states and 70 cities. We plan to expand this further to cash in on the boom in travel.
Which are the best and worst quarters for Cox and Kings?
We operate in different geographies and so the seasonal factor does not come into play at all.
What measures are you taking to increase the share of the customer’s wallet?
We have introduced a slew of attractive products and we believe this will induce customers to take more than one holiday. We see a trend where our customers take more than one holiday with us and this benefits us.
The company has been scouting for global acquisitions. Can you tell us the status of the same?
It is no secret that we are working on our acquisitions in various geographies. However, we cannot disclose any of it right now but are confident of closing it in this financial year.
What is the absolute level of debt and cash on the books?
As per the quarter ended December 2010, we have Cash of Rs 10.52bn and net debt of Rs 1.9bn.