While the collapse of British giant Thomas Cook shook the
travel world, companies targeting the American market said last week that they
were not concerned about negative fallout from global headlines detailing the
horror stories of stranded travelers.
Steve Born, chief marketing officer for the Globus family of
brands, attributed that lack of concern to a more sophisticated view of travel.
"Travelers are sharp to separate isolated business
issues from the big picture," Born said. "Americans have never shown
more resolve and enthusiasm for international travel. We can assure travelers
that the Globus family of brands has never been stronger, enjoying a record
post-9/11 year, and we are ready and able to meet travel demand today and in the
Likewise, Trafalgar CEO Gavin Tollman said his company
decided long ago "to focus on the emotional decision that is at the heart
of the travel purchase. That's why we're not worried about perception in the
While acknowledging that it's "sad when an established
brand no longer exists," Tollman said, "The fact is Thomas Cook is
not the first travel company to close, and it's unlikely to be the last."
Moreover, he said, the company "made mistakes."
"Their business model was flawed," Tollman said. "They
invested too heavily in infrastructure, and they could not be nimble because
they had to cover debt service. To do that, they had to generate sales by
decreasing price, which became a race to the bottom. The caveat for all agents
is to focus on suppliers who have long-term, sustainable business models."
John Tarkowski, president of Apple Vacations, said that
financial insolvency can hit any segment of the industry, be it hotels,
airlines or ground operators.
"Our size and breadth of product makes a strong
argument for working with a company like Apple Vacations versus booking your
clients' vacation components separately," Tarkowski said. "Should an
airline or hotel cease operations, we are situated in better position to assist
with a potential rebooking of your client."
He added that one takeaway for agents is that travel
insurance is becoming more important than ever, and the failure of Thomas Cook
should serve "as a wake-up call for clients who don't see travel insurance
as a necessity."
"Travel advisors should utilize this development to
drive home the point that the unexpected can take many forms and that it's
always prudent to protect their vacation investment."
Geoffrey Kent, founder and co-chairman of Abercrombie &
Kent, said the Thomas Cook failure emphasizes the importance of booking through
an established tour operator that is a member of the USTOA and its Travelers
Under that program, each member is required to post $1
million security in the form of a bond, letter of credit or U.S. treasury bill.