How Thomas Cook collapsed in the face of competition
Since 23 September 2019, Thomas Cook has been officially declared bankrupt, with the obligation to repatriate 600,000 travelers worldwide, "the largest repatriation operation in peacetime" for Boris Johnson, the current British Prime Minister. However, this bankruptcy did not happen on its own, the lack of adaptation to the current market was one of Thomas Cook's main shortcomings and allowed his competitors to stand out.
There are many alternatives to Thomas Cook today, the customer can create his own trip on the Internet, for example 20% of people manage alone thanks to low cost flights or Airbnb/ Bookings … Guests are also looking for something new, going to Rio De Janeiro to watch the pool is less and less popular. They need to feel like adventurers to have something to relate to their friends and family. They need it to post pictures on social media like Instagram, because if they stay at the swimming pool every day they can’t send different pictures.
Let's now compare with the 5 largest Brazilian travel agencies:
- The 5th: Gapnet, ($450 million in turnover): They offer travel without necessarily doing anything included, you can either book the plane or accommodation or excursions. It offers freedom to Brazilian customers. They developed the concept of Blog on their website to be able to give information to travelers according to destinations.
- 4th: Rextur Advance, ($720 million in revenue): A merger between Rextur and Advance went very well. It is a site that allows easy bookings through more than 60 airlines and 160,000 accommodations available worldwide. As well as other services such as car rental to facilitate travel for Brazilians.
- 3rd Flytour Group, ($1 billion in turnover): The company has the same activities as the two previous companies but also has a branch to manage business trips from A to Z. Just as tourist trips must now give way to freedom, but business trips must be planned, and the company has been able to evolve and put its know-how for organized trips to work for business trips. They own many subsidiaries, including "Gapnet".
- 2nd CVC, ($1.1 billion in revenue): This is the ideal comparison with Thomas Cook, Brazil's historical agency (created in 1972) with many agencies, the company has anticipated the digital revolution (since the early 2000s) by evolving more and more towards the digital revolution (creation of an application for example), but also by increasing partnerships with smaller operators. They were also the first to propose connecting with airlines, payment in 10 installments free of charge...
- 1st Decolar.com, ($1.3 billion in revenue): This is the only site that has languages other than Portuguese. It is therefore the one with the most destinations and the most things to visit for the farthest destinations in Brazil. For example, the site offers 20 accommodation units in Bruges while the other sites offer on average only 1 or 2 units throughout Belgium. Even Thomas Cook offers less (perhaps because they are currently bankrupt). In terms of turnover, it is not the first one if we focus only on Brazil, even on Latin America (it is then CVC), but it is the only one that has established itself over a wider area with the USA.
The common point of these companies is that they do not own any agencies (except CVC, which still has someone), unlike Thomas Cook. There are also examples of alliances that are well orchestrated, such as for "Rextur Advance", others that have understood the importance of entering the digital age or the importance of varying offers by giving consumers more freedom.
(Home page of Decolar)
So of course, these companies are not competitors for Thomas Cook worldwide, the turnover of the British firm amounting to $ 12 billion in 2018. But it is important to analyze that unlike Thomas Cook no of these companies lost money in 2018. Also, the establishment of Thomas Cook in Brazil is very low because of these firms who better understand the local market.
To conclude, Thomas Cook has not shown modernism and adaptation to the competition like Airbnb, booking at a worldwide level or Decolar and CVC at Brazilian level which have succeeded in meeting current customer demand and not that of 10 years ago.
Paul Leterc
Sources:
-https://top10mais.org/top-10-maiores-agencias-de-viagens-brasil/
-https://consolidadora.flytour.com.br/
-https://www.deepl.com/translator
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