Despite A Strong Past In The Indian Market, Reviving Cox & Kings Will Be An Uphill Task

Last week, the Singapore-based private equity firm Wilson & Hughes announced that it had acquired the once iconic tour operator brand Cox & Kings to operate in the Indian market. The 260-year-old company was originally founded in the UK to facilitate the transport of British soldiers in the colonial era. Over the decades, it grew rapidly and by 2018 it had offices in 27 countries with an enterprise value of US $1.2 billion. However, by 2019, in a bid towards rapid growth, it made several risky acquisitions leading to a mountain of debt of about US $650 million. In 2021, the Mumbai Company Law Tribunal ordered its liquidation.

However, despite the favourable market conditions for the travel, tourism, hospitality, and aviation industries in a post-COVID environment, the new move to bring back the Cox & Kings brand in India is fraught with risks and challenges. Primarily, they are: the challenge of reviving a legacy brand from scratch; key competitors like Thomas Cook and ITC’s International Travel House eating up the share of the market from Cox & Kings in its absence of three years; and the growing online marketplace for travel and tourism with a focus on technological innovations.

Reviving a Defunct Legacy Brand

The main reasons that Cox & Kings went down were alleged financial irregularities, money laundering, and funds diversion by its flamboyant CEO, Peter Kerkar. The Enforcement Directorate arrested him on November 26, 2020, and he has since been in jail in Mumbai.

Sapna Popli, Professor of Marketing at the business school, IMT Ghaziabad, says that it is very difficult to revive a brand which has lost the trust of customers, particularly on ethical grounds. For example, Starbucks globally, despite not being mired in any ethical issues, continues to struggle to get back strongly into the market and regain customer loyalty amidst falling revenues, declining same-store sales, and a series of CEO changes, highlighting the difficulty of reviving a brand even when the challenges are primarily financial and operational.

In cases where a brand is trying to regain its lost customer goodwill, what is important for the success of revival is the right positioning of the brand in the customers’ mind, along with appropriate messaging. “This is going to be a difficult task as Cox & Kings had acquired a negative image in recent years in customers’ minds. Therefore, it will be a long haul,” says Professor Popli.

Lost Market Share

Cox & Kings was shut down in India in 2021 during the Covid period. However, since the decline of Covid worldwide, the travel, tourism, hospitality and aviation industries have been on a roll.

An India Brand Equity Foundation (IBEF) report says the travel market in India is projected to reach US $125 billion by FY27 from an estimated $75 billion in FY20. Similarly, the Indian airline travel market was estimated at $20 billion in 2020 and is projected to double in size by FY27. Again, the Indian hotel market was estimated at US $32 billion in FY20 and is expected to reach US $52 billion by FY27.

The CEO of a large travel agency says, “People have started travelling with a vengeance. Both domestic and international travel have been growing. The Meetings, Incentives, Conferences and Exhibitions (MICE) segment has come back to its pre-Covid levels. And travel from India to the southeast Asian countries has grown exponentially with most of them adopting a visa-on-arrival arrangement for Indian tourists.”

While all this is good news overall for the travel and tourism industry in India, the reality for Cox & Kings is that it has missed out on this boom in its absence in the last three years, even as competitors have eaten up its share. It has to start from scratch all over again.

Growth and Consolidation of Online Travel Agencies

A report by Mordor Intelligence says that the Indian online travel market is expected to cruise at a comfortable CAGR of 10.5% in the next five years. During COVID-19, many of the smaller online players shut down or got acquired in a phase of consolidation. Therefore, the market is now concentrated in the hands of large online travel aggregators (OTAs) like MakeMyTrip, Yatra, Cleartrip, Goibibo, and Booking.com.

Backed by major private equity firms, many of these OTAs are also setting up physical shops internationally. Further, while some of the large traditional offline players like Thomas Cook today also have an online presence, competing with the big online players will not be easy for a new player like Cox & Kings. Apparently, Wilson & Hughes seems cognizant of this trend and has promised to bring in the best of Artificial Intelligence (AI), Machine Learning (ML), and data analytics.

The journey ahead is undoubtedly an uphill one, and given the challenges outlined—rebuilding trust, competing with established players, and adapting to the evolving online market—it seems unlikely that Cox & Kings can once again reign supreme in the Indian travel landscape. The company faces an uphill battle to regain its footing and recapture market share.