As World Tourism Day nears, Chahak Mittal examines the collapse of travel giant Thomas Cook, looking at how, amid a global slowdown, tourism facilitators guard their customers across the world
Imagine yourself vacationing in Santorini, Greece or a far away retreat in the world. It’s just the first day of your trip and the travel firm that you’ve booked your package with has been shut down. The firm has announced that it has failed to secure a bailout from its lenders and would soon go out of business. Well, as much as it would result in a loss to its hospitality and tourism services, hundreds of thousands of tourists would be forced to find a new way to get home.
When the world’s oldest travel giant Thomas Cook, UK, collapsed on Monday, it concluded that it had no choice but to take steps to enter into compulsory liquidation with immediate effect. Around 15,000 travellers were flown to their homelands in 64 flights. It recently revealed that most future holiday packages have been cancelled due to the announcement of its collapse. However, the refund arrangements for ATOL (Air Travel Oragnisers’ Licensing) customers is expected to be detailed by September 30. But holiday-makers will have to wait to get their money back as it claimed to have been paid within two months of being submitted.
Well, the travel industry has been bogged down by such failures and shutdowns over the past decade. And this one certainly reminds one of those many nightmares. For instance, when the Icelandic carrier Wow Air shut down in March 2019, its repercussions resulted in 2.3 million travellers being stranded at various places across Europe and other parts of the world. The Rodgers Travel loss turned out to be an even bigger jolt to the holiday-makers, despite its circumstances being slightly different. Another case, that of Jet Airways, which had shut down its operations temporarily on April 17, left 20,000 employees and more than 60,000 customers affected indirectly. The second-largest Indian passenger airline flew more people than national carrier Air India overseas. Even Cox & Kings-owned online booking website, LateRooms, and travel firm in the UK had shut down in August 2019, leaving thousands of customers in a lurch.
Now, even though the response by Thomas Cook might have given some relief to the troubled tourists, the question here arises is that how do travel facilitators protect their stranded customers in case of such emergencies? What are the policies and measures they adopt? Do they have any immediate properties to relocate their customers to? Are there any pre-cautious warnings or insurances which people could avail? The question makes even more sense when we look at the larger picture — online penetration has risen by 42 per cent after the advent of online travel companies over the last five years. And as per the data, total online bookings will increase by 42 per cent by 2022. Given that these bookings have seen such a sharp rise, why shouldn’t travellers be made more secure?
Durgesh Nandan, CO-founder and Coo Ithaka Travel, said, “The world is increasingly becoming independent with the penetration of internet. Companies, which are collapsing, are badly managed and are not able to adapt to the current and changing times. Travel is a thin-margin business and traditional companies, which are not leveraging technology, are finding a hard time to manage profitability and an excessive number of bookings from across the globe.”
He suggested that contracting in a way that all the payments are made post the availed service could be a way.
Roshan D’Silva, CEO and founder, TripVillas, looks at what has happened with Thomas Cook as “blatantly illegal” and an “unethical” behaviour and that a responsible travel company wouldn’t have been in such a situation. He suggested, “Consumers should only transact with brands and travel agents that they trust and have been following for a while. The only way for consumers to protect themselves in such situations is to buy a travel insurance and always pay for travel using a credit card where they can get a chargeback in case the service is not delivered.” Since most of the bookings are made in advance today, in such emergency cases, customers are liable to get refunds for their payments.
Speaking of its protective measures, he pointed out that TripVillas has a policy of “escrowing all customer funds and paying the holiday home-owners and hotels only post successful check-in. We also verify all home-owners and in case of any such uninvited incidents, we have a policy to relocate the customer to an equivalent or better property immediately.”
For Mohit Poddar, CEO and founder, Shoes on Loose, it’s very disappointing to know about the company’s unexpected breakdown and how it has impacted the customers adversely. “Lot of predatory pricing is being followed by some big players in order to create a monopoly in the market. Industry bodies like the Competition Committee of India and certain laws like Monopolies and Restrictive Trade Practices Act were created in order to curb unethically competitive pricing strategies. The objective of such an act is to prevent the unwanted growth of private monopolies and concentration of economic power in the hands of a small number of individuals. In order to have a healthy growth of the market and avoid such unexpected events in future, these practices need to be enforced in the industry,” he suggested.
He pointed out that what happened with the travellers because of Thomas Cook shutdown was quite unfortunate. “And in such cases, the government should intervene to protect travellers’ interests reasonably. Also, it is a company’s responsibility to either provide their travellers with a feasible substitute or prior information to them and their partners in order to avoid the entire hotch-potch.”
Experts also point out that the collapse of Thomas Cook comes at a time when airlines are being squeezed more than ever into schedules due to increased competition from low cost, “no frills” carriers. Also, most of the giants in the travel sector are usually struggling due to slowdown because expenditures on travel are the first thing people put a hold on when their going is tough. Hence, one of the biggest things that travel experts suggest is to pay via credit cards for the easier way out.
One of the recent tweets by a Thomas Cook air hostess, after the emergency occurred, said, “TC crew being held in their hotel in Cuba. Hotel is not letting them leave. Asking for $3,000 but not accepting payments by credit card. Need help!” The Cuban resort had held the crew hostage until the payment was received for accommodation.
