Concerned About Thomas Cook Travel’s Collapse?
In case you missed the story, Thomas Cook, headquartered in the UK and in business for over 175 years, shut down the other day, stranding over 600,000 vacationing travelers, not to mention how many more were booked on trips yet to depart.
Now, the government is working to get those stranded travelers home.
Without a doubt, this was a major blow to the travel industry and may cause travelers to wonder and worry about finding themselves in the same situation.
While we don’t claim to have any insider information about this event, there’s no point in hiding our head in the sand. This was a major travel disaster of the human kind. As retail travel professionals, we want to acknowledge this unfortunate affair and respond to those that are worrying and wondering about it by clarifying how this happened and offering information to help ease fears.
While it’s hard to point to any one reason for TC’s collapse, the company was making a significant investment in opening up many more retail locations some years back at a time when many UK consumers who shop on the cheap were booking online. Some speculate rising fuel costs and, though less likely, fears about Brexit may also have had an impact.
Another factor was the unusually hot weather which caused many to stay home; those beach vacations the Brits are so noted for taking may not have sounded so appealing. Additionally, this was not the first time Thomas Cook had found themselves in this type of financial predicament.
The profits earned on cheap travel packages, which Thomas Cook largely specialized in, are quite low, and budget travelers will invest time to shop wherever they can get a better deal, regardless of what support, professionalism, financial credibility, etc. is or is not available. But a business based in cheap travel is harder to sustain; witness WOW Air, which also shut down, and now is being revived again with additional capital infusion. (Thomas Cook did try to cobble together additional investment to save the business, but those efforts fell apart.)
Perhaps one of the unique challenges with the Thomas Cook Affair (apologies to the fine film of a comparable name), is that the company owned all aspects of the travel experience, which is very unusual in the travel business: they owned the airlines they used, the wholesaler that packaged their trips, many hotels, and the retail stores that sold them. Like dominos, it turns out, the impact of failure resonated across the board, and they all fell down.
The perfect storm.
In the U.S., I’m not aware of any similar set up in travel. TravelStore, for example, is a retailer that arranges and sells travel. We work with a variety of vetted wholesalers and destination management companies around the globe and can move clients as needed from one to the other.
We keep a keen eye on the companies we book our clients with, and while there is never any guarantee, we, and the consortium we belong to, Signature Travel Network, make sure we perform due diligence to protect our clients from finding themselves in this type of situation as best we can. We don’t own any airline and use multiple airlines for our clients. We don’t own hotels. There is no comparison to be made with Thomas Cook, and U.S. travelers shouldn’t shy away from booking with professionally-established travel advisors. In fact, they should rely on them more than ever because booking online offers no assurance that help will be there if and when you need it. What’s more, our business is diversified between corporate travel and leisure travel.
Bottom line is, there is really no need for travelers to be worrying about finding themselves in the same situation. We know if we step out of our house each morning, there’s a chance we may get hit by a car or robbed or whatever. We still get up each day and leave the house. Life goes on and what will be will be. What we do is take reasonable precautions to minimize our risk. In travel, we encourage you to buy travel insurance (and no, we don’t own a travel insurance company either).
The added protection is certainly valuable if you come to need it (no different than car insurance).
Regarding booking on the cheap, we feel one’s vacation is too precious and valuable a time to waste, and travelers should make every day count. Except for students and those on a severe budget, cutting corners to save on a vacation is often a poor choice because, in the end, the experience you’ve paid for doesn’t deliver what it could have. That doesn’t necessarily mean always spend more, but it does mean don’t scrimp and spend wisely. A better vacation will cost you more than a mediocre one. A good sleep in a comfortable bed that’s centrally located to where you want to spend your time may be very important to the workaholic that’s on vacation with limited time. That may not mean booking a five-star luxury hotel, but maybe a four-star hotel is worth it even though it costs a bit more than a three-star hotel because it saves you so much time getting around, allows you to walk to sights, and provides a good quiet sleep at night. Winging it in a city on your own certainly has its fun aspects, but unless you have time to read up and research what you’re seeing (or what’s worth seeing), you may miss a lot, and you’ll spend a lot of time figuring out how to get around (even with a smart phone in hand). Sometimes, having a local guide to walk (or drive) you around is a great way to learn more about a culture or a sight as well as enjoy the interaction with a local expert.
So don’t sit home and worry; get out and travel if you can, while you can, and use a professional travel advisor as your advocate to help arrange your trip. All the better if they’re a member of ASTA (TravelStore is a premier member) and a major travel consortium (TravelStore is, as mentioned, a member of Signature Travel Network).