Thomas Cook – more than just a glitch?
Although on the cards for some time Thomas Cook’s collapse still comes as a major blow for tourism and the travel industries. Not surprisingly it is dominating today’s media with an immediate human focus on the impact on, and the recovery of those, holidaymakers already abroad and those who have booked and paid for holidays, now cancelled. This will be disturbing for the individuals concerned but much of it is recoverable, albeit at a cost to insurers, to the ATOL scheme and to Government.
Less easily or quickly fixed will be the loss of some 9k UK based jobs (and those of an as yet unspecified number of UK residents within the c 12k employees based/working abroad?) and the closure of over 550 travel agency shops (figures given vary between 560 to 600). This will have serious implications, not least on the UK high street and for local communities, including Peterborough, the HQ location for this major UK company.
Over the coming days and weeks there are going to be a range of issues emerging around the impact on UK regional airports, on other airlines and the carving up of vacant airline slots. There are also some big questions to be asked, and hopefully answered, around the future capacity for both holiday flights and for outbound UK holiday travel and, within that, especially packaged holidays. In particular, is the traditional package holiday, the traditional sales model and, by default is the protection that packaging currently gives, still sustainable?
Other existing or new travel operators may well take up the slack on a similar basis, or the significant volume of package business sold by Thomas Cook annually within the UK (and in other EU countries) might now shift more rapidly towards online, dynamic packaging. Some of that online product may not offer the same levels of consumer protection, nor importantly for HMG, contribute as much in the way of UK employment or UK tax revenues, against very substantial UK sales.
The events at Thomas Cook shouldn’t just be viewed as an unfortunate glitch by the rest of the wider industry but a symptom of problems that need to be forensically analysed and then addressed, or if they can’t be addressed, then at least managed. Thomas Cook didn’t accumulate somewhere in the region of £1bn debt doing nothing. Understanding how and why could be critical in understanding what the future may hold for domestic outbound travel and by inference, to some degree, UK domestic tourism as well.
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