Do we still need travel agents to book our holidays?
Thomas Cook, the company that invented package holidays and which has been guiding and reassuring travellers for more than 150 years, is facing some serious head winds. Its long-serving chief executive resigned during the summer after the third profits warning of the year, and on Tuesday it announced that it is borrowing another £100m to tide it over the difficult winter months.
The news has sent shudders through an already nervous travel industry, and spasms of anxiety through anyone who has booked a Thomas Cook holiday.
On that last point, its customers can relax. The company continues to trade normally, and even if it did go out of business, the money paid in advance for all package holidays – whether with a Thomas Cook tour operator or one of its travel agents – will be refunded by the ATOL and Abta bonding schemes.
Cook’s problems will not be quickly sorted, however. Since the summer, it has, like all travel companies, faced a near perfect storm of negative news. Key destinations – Egypt, Greece and Tunisia – have been rocked by civil strife; Bangkok, gateway to some of the major winter sun resorts in Thailand, has been submerged by flood water; and tourists have been kidnapped from the idyllic white-sand beaches of Kenya.
If that isn’t enough, last year’s sharp rises in departure tax, record oil prices and a pound which has been at a historic low against the euro for three years, have pushed up costs. Spending cuts and the euro crisis have left all of us more worried about keeping our jobs than booking next summer’s holiday, let alone thinking about a winter break – especially when there is still no snow in the Alps. Even in good times, it is hard enough for tour operators to attract bookings during November; this year it has been nigh on impossible.
While tour operators struggle to sell package holidays, those companies that serve the independent traveller seem to be thriving despite the recession. British Airways, Ryanair and EasyJet have all announced bumper profits recently, and online companies such as Expedia and bookings.com are grabbing a bigger and bigger share of the market. Meanwhile, in a recent poll of 23,000 travellers, the US was voted the most popular country for a holiday – a destination that attracts a particularly high proportion of independent travellers.
A key point to remember, however, is that travel is a notoriously unstable business. Big names have always come and gone, leaving others to pick up the bookings. One of the reasons why package holidays are now bonded to protect customers’ money is because of a series of major collapses. The oil crisis of 1973-74 put paid to Clarkson and Horizon, the Gulf war saw off Intasun and Air Europe in 1991, and it is only just over three years since the airline and tour operator XL went under, leaving about 85,000 people stranded.
Thomas Cook is not likely to join this list; it is still expected to post a reasonable profit for last year. But it has yet to come to terms with a new type of customer and reinvent itself in a way that appeals to them.
Twenty years ago, many of the desk clerks in its high street shops would know significantly more than their customers about the destinations they were thinking of booking, and they had information and resources the customer didn’t. They could give them meaningful advice and justify their commissions. Now, many of those customers are likely to be far more experienced travellers than the clerks.
When people are planning a holiday to a mainstream destination such as Majorca, they may be going back for the second or third time. They will have a much clearer idea about where exactly they want to stay on the island and know that if you want a list of recommended hotels in Majorca, you don’t have to ask a travel agent.
You might search in Google, or check an established website. And when you have found that hotel, you will want to book it at the best price. Again, that is best done either directly with the hotel, or through a specialist booking website – not necessarily a travel agent or a tour operator.
Not only will you find the best rates, you can also be flexible about how long you stay – you may not want a seven or 14-night package and a coach transfer from the airport. First, if you have been to Majorca before, you will know your way around; second, you will have found a hire car – again by searching on the internet.
And certainly, when it comes to booking your flight, you probably won’t be phoning a Thomas Cook travel agent. The most effective exploiters of the internet age have been airlines, and especially the no-frills carriers. Though they now risk alienating travellers with a myriad extra charges, they have still made booking easy, more flexible, and, crucially, they have slashed the cost of flying to the point where operators and travel agents simply can’t compete. There are some honourable exceptions. Agents with specialist knowledge, especially to more exotic destination, such as Trailfinders, still thrive and offer excellent value.
But, despite the emergence of a new breed of confident, independent traveller, it seems to me that there are good reasons why tour operators (the companies who organise holidays, as opposed to the shops that sell them), have reasons to remain optimistic. They offer a measure of security in a world which is becoming increasingly unpredictable – financial protection, and a duty of care when something like the ash cloud strikes, a terrorist threat emerges or a destination descends into civil war. The extraordinary growth in the popularity of cruising is perhaps the best indicator that there are more and more people who like to feel secure and pampered on holiday and don’t want to take on the responsibility of organising everything for themselves.
Tour operators have proved themselves to be adaptable animals. They know how to look after their traditional customers, and they know how to appeal to those who like to try new places. They have prospered recently by moving capacity away from more expensive eurozone countries like Italy and Greece, and offering good value packages to destinations where people feel less confident about booking independently. The trouble for them is that these countries include Egypt, Tunisia and Thailand.
Maybe in all of us there is a tension between the traveller and the holidaymaker. We love travel because it is exotic, different, exciting, unpredictable. But we want our holidays to be hassle-free, relaxing and safe. Because of this, there will always be a place for companies that can adapt quickly, and offer a more secure form of holiday. The trouble is that, at the moment, not many of us can afford to book with them – as Thomas Cook is discovering to its cost.