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Thomas Cooking No More


Does the sudden demise of Thomas Cook, two years after that of Monarch, another tour operator-airline, signal the end of the era of the giant, mainstream tour operator hit by the giant internet meteorite? Is it a welcome step away from concentration (Thomas Cook having merged with MyTravel in 2007 to create a European 'giant') towards economic democracy,or just a shift from the high street chain, where now only a small minority purchase their holidays, to bookings through Online Travel Agencies/platforms and, to a lesser extent, directly through provider's social media and websites?

Thomas Cook's rivals such as TUI, do not seem to suffer from such problems as they are vertical companies that own their accommodation, so it is too soon to say, if Thomas Cook's demise is part of a broader trend of socioeconomic significance. Other factors at play, according to analysts were Brexit-related uncertainty and the devaluation of sterling it caused (which probably was the last straw for the company that had nearly went bust as early as 2011). The shift away from sun and sea packages towards city breaks, encouraged by Airbnb-style supply and cheap airlines such as Ryanair and easyJet was also pivotal.

In the meantime, the UK government has to airlift around 150,000 of stranded UK holidaymakers at a scale not seen since WW2. But It is unknown what will happen to some 400,000 foreign holidaymakers who must return to other countries. What is certain is that life is far worse for some 21,000 employees, including 9,000 in the UK, who have been just made redundant. Thomas Cook-dependent Mediterannean holiday destinations like Skiathos, Kos and Crete, where 70% of travel businesses had an agreement with the fallen giant (according to Michalis Vlatakis, head of the Cretan Travel Agencies Association) will also take a serious hit not only because of cancelled bookings but mainly because of yet unpaid commissions for the whole current season in some cases. Vlatakis spoke (on Thema 104,6 Radio) of the collapse causing a huge earthquake with a 'tsunami' also awaited. Some even fear that Thomas Cook's departure will lead to monopoly-type situations with some islands being at the mercy of just one dominant major tour operator.

Reports say some parts of the Thomas Cook empire appear still to be functioning, such as Condor, the German airline and Thomas Cook India that is majority-owned by Indo-Canadian billionnaire Prem Watsa and his Fairfax group, so who knows, this household brand may even be resurrected in the future.

The moral of the story, if there is one, for accommodation providers of all sizes is: depend upon your own exertions, create a loyal customer base and encourage direct bookings! It may look harder but it will pay in the long run. The moral for travellers is do not forget travel insurance!

What would Thomas Cook (the founder, 1808-1892) have made of all this? Hard to say, but there is some irony as Cook got the original idea to offer excursions while "walking from Market Harborough to Leicester to attend a meeting of the Temperance Society", and it may be this silent shift towards local holidays and staycations in the era of Climate Crisis that destroyed his creation. 

I think this occasion also highlights the importance of the control of the means of tourism production, in particular, airports and airlines, and the type of production of course.

If a Thomas Cook (formerly) dependent destination, let's say Skiathos, had developed their own, municipality (democratically) owned incoming tour operator and leased aircraft would they have been spared by the risks of the "dying old tourism capitalism" or would it be even riskier (lack of know how) and just a form of popular capitalism similar to the privatisation of council blocks in the UK by the Thatcher government?

Or should small island destinations, turn their backs to mass tourism altogether, and focus on attracting fewer, slower, greener travellers using passenger ships and yachts (or even cruise ships that in some cases can be marginally 'greener' than airlines).

The broader question is could/would 'tourism / travel/ hospitality' spearhead a transition to a new world model (also considering that its stakeholders are not particularly 'progressive' or green or eager to cooperate for the 'common good') or are they hostage to more powerful industries and their financial backers, in which case the change must be political - forced through electoral processes and legislation?

It may take time: in the absurd era of financialised capitalism, hedge funds that bet in favour of Thomas Cook's demise, stand to gain at least USD 250 million!

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