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Did the package holiday die with Thomas Cook?

Millions trusted the travel company to deliver their dreams. But before we declare the once successful business model to be in its endgame, Simon Calder considers how we got here

Holiday from hell: thousands of British tourists were stranded in Spain after the collapse of Thomas Cook in September
Holiday from hell: thousands of British tourists were stranded in Spain after the collapse of Thomas Cook in September
Wish you were here: Thomas Cook opened up holiday destinations in the Costa del Sol, Paleokastritsa beach in Corfu and Magaluf beach in Majorca
Wish you were here: Thomas Cook opened up holiday destinations in the Costa del Sol, Paleokastritsa beach in Corfu and Magaluf beach in Majorca
Wish you were here: Thomas Cook opened up holiday destinations in the Costa del Sol, Paleokastritsa beach in Corfu and Magaluf beach in Majorca

By Simon Calder

To make travel simple, easy and a pleasure" - that was the vision of Thomas Cook, who democratised leisure travel. The Methodist preacher from Derbyshire refused to accept the conventions and costs that restricted the horizons of working men and women.

He industrialised travel, initially chartering an entire train in 1841 and selling each seat at an affordable price, and went on to establish a business that girdled the globe.

Cook's main motivation was spiritual, not financial: he wanted people to experience the wonders of God's world, and believed that mass tourism was a potential force for good to bring humanity together.

And he understood the joy of discovering an exotic new destination (even though, for that pioneering trip, the train was bound no further than Loughborough).

The company that bore his name became the most robust brand in travel, and hundreds of millions of holidaymakers put their trust in Thomas Cook to deliver their dreams.

And then, at 2am on Monday, September 23, 2019, that 178-year mission ended. Nine thousand men and women lost their jobs when the UK tourism business folded. Close to one million customers had entrusted Thomas Cook with forward bookings, for holidays that now no longer existed.

Hundreds of thousands of people are currently experiencing a facet of travel that is neither simple nor pleasurable: claiming back payments for future trips.

Brexit uncertainty, fears about terrorism and the long, hot summer of 2018 were all blamed for the collapse of a company that many felt was too distinguished to fail. Any company that goes bust owing £3bn has more fundamental challenges. In Thomas Cook's case it was an abject failure to respond adequately to the growth of competition, especially from low-cost airlines, and to embrace fully the digital revolution. (One reason refunds are taking so long is the firm's labyrinthine and incoherent collection of IT systems.)

But was the failure of Thomas Cook an inevitable consequence of the rapid change in consumer choice and technology, signalling that travel has passed a tipping point? Certainly, the company's principle product looked long in the tooth: a holiday of fixed duration with flights, transfers to and from the resort, and accommodation. It also looked unprofitable. Just two hours before the travel giant failed, I bought a seven-night Thomas Cook package in Corfu for £187. That is less than a week's work at the national living wage.

By the time the firm had provided nearly 3,000 miles of flying, a coach to the resort and a clean and comfortable place to stay for a week, my booking was not going to be much help in paying off its enormous debts.

In the event, the trip vanished along with Thomas Cook. Instead, I bought a couple of cheap flights from Gatwick to Mallorca - out on easyJet, back on British Airways.

I will sort out the bus and hotel independently, as millions do each year.

But before we bid farewell to the package holiday, it is worth considering how we got here. Corfu and Mallorca were among the glorious Mediterranean islands to which Thomas Cook dispatched tourists in the first half of the 20th century, when the Med was seen strictly as a winter destination. These were far from ordinary holidays. So high was the price that, for the average working man or woman, these trips might as well have been to the moon.

In the 1930s, the British Workers' Travel Association - the holiday wing of the Labour Party - did its best to expand the horizons of members, but overseas travel remained for the few, not the many. Until the Second World War began and millions of servicemen and women were deployed on foreign soil. Many never returned.

Five years after the end of the war, the first "proper" air-inclusive Mediterranean package holidays were created - without the help of Thomas Cook. Instead a young Russian Jew emigre named Vladimir Raitz used his grandmother's bequest to launch a company he named Horizon Holidays. He chartered an ex-military propellor plane seating 32 people. And a lucky few inhabitants of a nation grinding through post-war austerity found themselves transported from Gatwick to a close approximation of paradise: a Mediterranean island.

In 1950, Horizon would take you anywhere you wanted to go as long as it was to northern Corsica. Getting there was hardly part of the fun. The Douglas DC-3 from Gatwick had to refuel en route in Lyon. The trip took all day, and the crew had to rest overnight on the island before the arduous flight home.

"It really was absolutely no frills," was how Raitz later described his first flight.

The pioneering holidaymakers were taken on an antique bus from the airport at Calvi to a "resort" that comprised a collection of ex-US military tents beside the beach, branded as Club Olympique. (The canvas community has since vanished, but the club's name lives on as a stop on the local rail line along Corsica's north coast.) The accommodation was rudimentary, but the offer was seductive: all the food and wine the escapees from the dreariness of Fifties Britain could consume - along with sun, sea and, for some, the rare novelty of sex.

This was not Skegness. And like Thomas Cook a century earlier, Raitz had ignited a travel revolution. The UK's first all-inclusive fortnight's package holiday cost £32:10s, equivalent to £1,000 today, but prices soon started falling. War-surplus DC-3s gave way to the Vickers Viscount.

The high-tech turboprop held twice as many passengers and was pressurised to allow it to stay above the worst of the weather. With the plane, Raitz soon expanded into Spain.

Initially, passengers flew to Perpignan in France and were bussed across the border, pausing to buy Spanish visas en route to Estartit on the Costa Brava. But soon Raitz was taking travellers to the island of Mallorca, hardly known except as a bolt-hole for the rich and famous, such as Robert Graves and Agatha Christie. Like many despots since, General Franco saw tourism as an economic saviour for a stagnant country. By 1963, a quarter-million British holidaymakers took a package on Mallorca, with business soon spreading to the nearby islands of Ibiza and Menorca.

Within three decades, nearly 10 times as many were flying to the Balearics annually, and getting there in a comfortable couple of hours. (None were travelling with Horizon Holidays, which failed in 1974 during the last convulsion of the British political system.)

But in the 1990s the package-holiday firms failed to spot the threats to their comfortable business model. The introduction of "open skies" in Europe started the no-frills revolution involving easyJet and Ryanair, while the internet slowly became an online sales platform.

Until then, travel to the Med at reasonable prices had been available only through your friendly local travel agent (or, for some customers, the holiday firms' call centres).

They were the gatekeepers for flights and accommodation, wrapped up and sold at a single price. Even when buying a "seat-only" deal a legal pretence was often maintained that required the traveller to pretend to enter into a contract for somewhere to stay.

But by the end of the 20th century the holidaymaker who wanted more flexibility than the fixed one or two-week package was free to book a tailor-made trip. The fixed menu that had been on offer in the travel brochures was replaced by the ultimate in a la carte: sourcing flights, accommodation, rental cars and much else either direct or through intermediaries such as Expedia or Travel Republic.

In the face of the biggest transformation in travel for half a century, the traditional package holiday firms stuck to their knitting as they watched customers vote with their PCs, laptops and now mobile phones. The "big four" tour operators became the "big two" when Thomas Cook swallowed up MyTravel and Thomson teamed up with First Choice - and later became Tui. They continued to pay high rents to maintain hundreds of travel agents on the high street. Tui successfully moved upmarket, offering an increasing number of exclusive properties such as the Sensimar brand, and using ultra long-haul aircraft to open up destinations only it could reach in one hop: this month, the Mexican resort of Los Cabos became accessible from Gatwick.

But Thomas Cook, mired in debt, could not invest its way out of decline. So, you might conclude, there is a bit of life in the package holiday - but only room for one mass-market player, who can manage its decline.

Yet that is to ignore the travel industry success story of the past decade: Jet2. From a foggy start with a 2003 flight from Leeds-Bradford to Amsterdam, the budget airline has thrived despite being up against Europe's two biggest and meanest budget airlines, easyJet and Ryanair. And five years after its launch, Jet2 went into delivering "package holidays you can trust".

While Jet2 happily sells direct and through independent travel agents, it has no expensive high street shops to staff.

And while the two giant no-frills carriers have struggled to develop a persuasive package-holiday offer, Jet2 has prospered in a market that was supposed to be in terminal decline.

It has demonstrated an appetite for a single purchase of a family holiday, with a decent luggage allowance, some civilised departure times and, to many destinations, a choice of daily departures so that five- or nine-day breaks are perfectly feasible.

People in the UK evidently still appreciate package holidays done well. If Jet2 Holidays needs a fresh slogan, it could try: "To make travel simple, easy and a pleasure". Sadly, Thomas Cook no longer needs it.

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