Thomas Cook plans to become the largest online travel agent in Europe where there is currently no dominant player, chief executive Manny Fontenla-Novoa revealed.
Speaking exclusively to Travolution he said Expedia and Priceline had the online travel market pretty much sewn up in the US, but that the marketplace in Europe was “totally wide open”.
“Tui up until now has been concentrating on increasing online sales of its own product – it is not an online travel agency where you would think to go for a BA flight or a cruise.
“Expedia is a fantastic online retailer, but mainly of hotels in cities and airline seats – not beach product. This is why we see an opportunity for us and why we’re so excited about it,” he said.
“There’s a space we want to go into. Expedia has 100,000 hotels across the world. We want direct contracts with all of those; add them to all the beach product that we’ve already got and we’ll have the widest range of anyone. That’s what will make us unique.”
Fontenla-Novoa said his vision for Cook’s OTA business as a pan-European agent, was to offer consumers the ability to book flights, cars and hotels all over the world, mainly for leisure short breaks.
Cook has taken on former Expedia managing director Simon Breakwell to help realise the dream.
Fontenla-Novoa explained that ‘independent travel ‘, or non packages, accounted for 25% of Thomas Cook’s total revenues.
And he predicted sales of package holidays online would never go beyond 35-40%.
“Currently 30% of our packages are sold online,” he said. “I actually think there are signs that online is slowing down. I think the high street will thrive – I always said that even when others were predicting its demise.
Cooks currently operates 800 shops in the UK which Fontenla-Novoa still believes will reduce to between 650-800 over the next five years.
“We will invest in all channels and let the customer decide. What I have to do is have enough flexibility in my model, so that if one channel declines, we can react,” he said.
In a recent investment day for the City Breakwell set out Thomas Cook’s ambition to become a top three European OTA.
He said it was targeting £3-£3.5 billion of incremental sales in the medium term and “significant profit” from OTA growth.
A strategy document added that the OTA model would open up new source markets including Spain and Italy and claimed, with 2.6 million unique users in January it had a “significant platform to build on”.
It concluded “work is well underway, with thomascook.com UK sales already up 30% year on year”.