Thomas Cook Group may have caved in, but in China and India, the companies that bear the name are profitable. Why?
The demise of UK-based Thomas Cook Group brings a wave of nostalgia to Asia and the reality that the traditional tour-operating model is incongruous in the internet age.
Another reality is that Chinese and now Indians are the new linchpins of Asia’s tourism growth, unlike before when the Western markets raring to explore “the exotic Far East” supported destinations.
It’s a sign of the times that the eponymous European name lives on in Asia through Thomas Cook India and Thomas Cook China. (At press time, the Nordics unit of Thomas Cook Group confirmed it will remain in business, but it’s still unclear if the continental European business will continue.)
Both Thomas Cook India and China aren’t running on the traditional tour-operating model. Both are also highly diversified. They have just scratched the potential of their huge markets. And neither have the legacy systems and structures that weighed down Thomas Cook UK.
Fosun Tourism Group, the majority owner of Thomas Cook China, is strengthening its Foliday (Fosun Holiday) concept and using technology to keep customers loyal to its growing ecosystem of travel businesses. Aside from Thomas Cook China, this includes Club Med, Atlantis Sanya, Cirque du Soleil, and Miniversity, an edutainment joint venture with Mattel.
Similarly, Thomas Cook India offers a broad spectrum of services including foreign exchange, corporate travel, meetings and incentives, leisure travel, insurance, visa and passport services, and e-businesses.
Asian millennials working in the travel industry may wonder why their elders are lamenting the death of a company that sits thousands of miles away.
What the older generation mourns is the end of an era. Many are likely reminiscing about their annual pilgrimage to Berlin where, in the halls of the trade show ITB Berlin, they huddled together with contract managers of the European tour operating companies to negotiate rates and room allotments. Among the biggest groups were Thomas Cook, TUI, Rewe, Kuoni, and Hotelplan. They were the Expedia and Booking of the day.
The new generation would find it all so strange. In the pre-internet era, tour operators produced thick brochures a year in advance for distribution to their network of retail stores, which then sold the tours to customers. Getting into those brochures was the way Asian hotels and inbound agencies reached the European market.
A deep symbiosis therefore existed between Asian sellers and European buyers. Many struck long-lasting relationships, as sellers and buyers conducted a lot of business face to face — and often over lavish dinners on the company expense account. It was hard work in the winter but also fun and memorable.
Then the party stopped.
Skift Stories and More Expert Insights
Asia Reels From Thomas Cook’s Collapse as Travel Businesses Sort Through the Confusion: Kuoni died, and now Thomas Cook, even though on September 24 the Nordics unit confirmed that it would remain in business and invest further in it. There is still no word, however, whether the continental European business will continue. Thomas Cook’s tour operating market in its glory days practically made Asia tourism, so many across the region are mourning this loss, reconciling themselves with the fact that nothing lasts forever.
Can Thomas Cook’s Surviving Brands Find New Homes? Thomas Cook wasn’t just a UK business: It had operations across Europe, some of which were pretty profitable. They’re now in a race against time to secure their future and find new owners.
Fallout From Thomas Cook’s Demise Will Reach Far and Wide in Travel: Expedia, Webjet, and On the Beach all had exposure to Thomas Cook, but given their size they can probably handle it. It’s the smaller tour operators and travel agents that will be the hardest hit.
Marriott and Expedia Exclusive Agreement Will Retake Control of Wholesale Rates: In an I-just-saw-an-elephant-fly moment, Marriott International will be directing businesses to Expedia Group to access certain Marriott wholesale rates. Bedbanks, tour operators, and smaller online travel agencies that play games with room rates are put on notice.
Accor Launches New Economy Brand Greet: Greet’s nonstandardized approach will help it separate itself from other hotels in the economy segment, but individuality comes at a cost and may mean the rollout takes a little longer than equivalent cookie-cutter brands.
Oyo Turns to Danamica for Artificial Intelligence Firepower for Vacation Rentals: Oyo is more than just a budget hotel operator these days. Investments into its vacation home rental business are proof of that.
Travel’s Green Revolution Remains a Work in Progress: We’re at the beginning of a period of long-term change toward more sustainable business practices from members of the global travel industry. Executives who take a proactive approach will be rewarded for not just being ahead of the curve but doing the right thing.
Asia Editor Raini Hamdi [[email protected]] curates the Skift Asia Weekly newsletter. Skift emails the newsletter every Wednesday.
Photo credit: Chinese tourists take in the sights of the New York Stock Exchange and Federal Hall National Memorial. UK-based Thomas Group collapsed on Sunday, but the brand lives on in China and India. Mary Altaffer / The Associated Press