Tourism as usual for Western Cape following collapse of Thomas Cook

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

It had provided a significant number of tourists to the province, but not the majority, she says.

She points out that the tour operator’s former airline competitors such British Airways, Emerald and Virgin Atlantic still operate regularly – not seasonally, like the fallen Thomas Cook airline.

Read: Thomas Cook collapses

Dykman says the airline’s downfall is a result of economic conditions and the shift to e-commerce that has seen many bricks-and-mortar retail travel operators shut across the globe.

The airline had a traditional and conservative way of selling to the market, while travel bookings were increasingly moving online, she adds.

Dykman says Condor, the German airline subsidiary of Thomas Cook, should make a U-turn soon and have flights operating as normal.

Charmaine Thome, Southern Africa GM at Aviareps, a Thomas Cook general sales agent, says customers currently on holiday through Thomas Cook need to be repatriated while those who have bought tickets through Thomas Cook airlines will be able to get a refund. She adds that Aviareps will not experience any job losses as a result of the travel group’s liquidation.

The road before reaching a dead-end

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

Thomas Cook & Son led the way for other travel agencies when it came to leisure advertising, 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 travel guides over the internet.

Although a major innovator in leisure travel, it found itself 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.

However, financial turmoil hit the group in March, resulting in 320 job losses.

The company, which had lost 64% of its customers to e-commerce services, recorded a £1.5 billion loss for the first half of the year and issued its third profit warning in less than 12 months.

Desperately trying to shift the blame, it said customers were postponing their summer travel plans due to the uncertainty around Brexit. It finally lost all hope, along with excuses for obtaining a private-sector rescue deal, on Saturday (September 21).

Thea Fourie, a senior economist at IHS Markit, says Brexit could well be one of the reasons that led to its liquidation.

Disastrous merger

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

“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,” she adds.

“The deal saddled Thomas Cook with huge debts.”

Fourie says the UK is the only country that will feel the wrath of the liquidation of the once-robust travel operator.

“Some will be affected in the short-term to the extent that tourism to the UK 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 firm that has felt the effects of the change in the economy and purchasing trends.

“UK regional airline Flybmi ceased operations in February due to higher fuel and carbon impact costs,” says Fourie. “One of Thomas Cook’s biggest rivals in the UK – [German travel and tourism company] Tui – issued two profit warnings early this year due to operational issues [the grounding of planes] while UK residents held up travel plans due to [heatwave conditions in the] summer of 2018 and a weaker pound.”