Over the past two months, this whole Thomas Cook travel agency failure has taken various twists and turns.
With this weekend, it's now apparent that out of the 510-million Euro that is part of the consumer or traveler 'risk'....only 110-million Euro will be paid by the insurance company (Zurich). The rest? All left in the hands of the travelers.
So if you had a trip planned or were on day one of a trip when they failed...out of the 2,500 Euro of cost and screw-ups....you probably will only get 500 Euro back. The other 2,000 Euro is lost.
How many affected? If you count Thomas Cook, and all the sub-companies....it may add up to a minimum of 150,000 across Europe.
The folks who had airline tickets arranged for Christmas already? Screwed royally.
All of this, I think, will lead to a vast amount of mistrust of travel agents and hurt the overall industry.....even those who are not associated with Thomas Cook.
3 comments:
Another triumph of capitalism. Owners slink off into the shadows, insurer bails, and the debt is sozialed to the customers. Bravo!
In this case, TC had spent the last two decades with a business model that was 'doomed'. They felt that you need brick-and-mortar shops in every town/village (mostly in the UK but also done in Germany as well). Competition went to the TV and internet options, and you could skip dealing with people and just figure out the options yourself. By using this method, you had less cost, and you could sell cheaper trips. Well...TC had to compete, and they weren't making enough profit for the brick-and-mortar idea to work.
They felt people wanted the personal touch, or that they couldn't handle the internet business. All of this led to higher cost, more loans, and inability to square away your books each year.
As for the insurance team (big name squad)...the policy that TC bought, was 110-million Euro (that was it). They haven't balled on nothing and will pay to the folks managing the bankruptcy. By spring, all the 'victims' in this mess, to include hotels, consumers, and airlines...will get their little piece of the deal. The left-over debt....as you say, will go to the customers. My guess is that all of them will refuse to use travel agents in the future, and you will see a huge decrease in package tours sold in 2020.
Blame? I'd say that TC should have dumped 75-percent of its brick-and-mortar shops back in 2010, and gone mostly to the internet and just large city shops. But they were in charge of their own destiny.
Then I withdraw my remarks about the insurer.
The rest stands.
Post a Comment