Don’t Just Book It, cancel It!

Debt-ridden tour operator, Thomas Cook will have no significant effect on the number of UK tourists visiting the Western Cape in the future, says Inge Dykman, head of leisure tourism, at Wesgro.

“Though we are not happy to lose on any business and we feel sorry for any company that loses room [in our industry]. Thomas Cook has provided a significant number [of tourists] but not the majority,” says Dykman.

She says the Western Cape local tourism industry still has Thomas Cook’s former airline competitors such British Airways, Emerald, Virgin Atlantic Airways that still operate regularly that do not operate seasonally, like the fallen airline Thomas Cook.

Dykman says the airline’s downfall is a result of an economic slump and the shift to e-commerce that has seen many retail stores shut across the globe.

“The airline has been taking a knock for the retail business because they have a traditional and conservative way of selling to the market, whereas everything [retail and travel bookings] has moved online,” she says.

Dykman added that Condor, the German airline subsidiary of the British travel giant Thomas Cook should make a U-turn soon and have flights continue to operate as normal.

Charmaine Thome, AVIAREPS general manager Southern Africa, which is a general sales agent of Thomas Cook, says though they will not experience any job losses as a result of the travel agency’s liquidation, however, customers that have bookings will be repatriated.

“Naturally there are people that have bought tickets from Thomas Cook airlines and they can get a refund,” says Thome.

The road before reaching a dead-end

The liquidation brings to an end a that began 175 years ago in the UK, when founder, Thomas Cook offered to take travellers on rail executions.  About seven years later the company was renamed Thomas Cook & Son when his son John joined him in the business, just before the business soared internationally.

Thomas Cook & Son lead the way for other travel agencies when it came to leisure advertisement and pioneered flights to the French Riviera.

In 1997, the company launched Thomas Cook Online, making it the first travel agency to offer customers a way to buy holidays, foreign currency, traveller’s cheques and guidebooks over the internet.

Although it was a major innovator in leisure travel, it found its self struggling to find its place in a more online-focused travel market. By 2011 its debt had ballooned to over £1 billion.

Two years later the company merged Thomas Cook Airlines in the UK, Belgium, and Scandinavia, together with Condor in Germany into a single operating division within the Thomas Cook Group.

But the near bust was nothing compared to the financial turmoil that hit the group in March this year resulting in 320 job losses. The company lost 64% of its customers to e-commerce services.

The embattled travel firm operator recorded a £1.5 billion loss for the first half of the year and issued its third profit warning in less than a year.

Desperately trying to shift the blame to Brexit, saying customers were postponing summer travel plans due to the uncertainty. It finally lost all hope, along with excuses for obtaining a private-sector rescue deal last Saturday.

Thea Fourie, a senior economist at IHS Markit says Brexit could well be one of the reasons that lead to the liquidity of the renowned travel agent.

“Thomas Cook’s woes go back to a disastrous merger in 2007, ballooning debts and the internet revolution in holiday booking as well as increasing Brexit uncertainty and a weaker pound.

“In reality, Thomas Cook’s merger with MyTravel in 2007 meant it was merging with a company that had only made a profit once in the previous six years, and the deal saddled Thomas Cook with huge debts,” says Fourie.

Fourie added that the UK is the only country that will feel the wrath of the liquidation of the once robust travel agency.

“Some will be affected in the short-term to the extent that UK tourism or from elsewhere is disrupted temporarily but there should not be a significant long-term impact,” says Fourie.

However, Thomas Cook is not the only travel agency that has felt a change in the economy and purchasing trends.

“UK regional airline Flybmi ceased operations in February due to higher fuel and carbon impact costs.  One of Thomas Cook’s biggest rivals in the UK, Tui, also issued two profit warnings in early this year due to operational issues (airplane grounded) while UK residents held up travel plans due to boiling-hot summer in 2018 and a weaker pound,” says Fourie.