Victoria Bacon, ABTA director of brand and business development, on the demise of Thomas Cook.
Two months ago the industry was rocked by the failure of Thomas Cook – a founder member of ABTA, a household name and one the world’s best-known travel brands. The fall out was and continues to be severe, with thousands of holidaymakers requiring repatriation from overseas and up to a million customers with package holidays cancelled, all of which were covered by either ATOL or ABTA. The industry has also rallied round offering support and job opportunities to the thousands of Thomas Cook staff who are so suddenly and sadly without work.
Thomas Cook’s financial problems are well documented, largely relating to a mountain of debt. However, some sections of the media decided that its failure had been caused by an outmoded business model, based on an old-fashioned holiday offer: the package. This line of thinking was further fed by some opportunistic comments from industry competitors claiming that fewer people are taking packages and that no one under 40 does.
But is there any truth in these claims and assertions? Let’s take a look.
Is it true that the number of people taking package holidays is in decline?
No. In 2018 official government statistics showed that 18.2m took an overseas package holiday. This has steadily risen in recent years, up from 15.9m in 2014. This is not far off the all-time record for package holidays which came in 2006, just before the credit crunch, which radically reduced demand across the board for all types of holidays. Packages now make up around 40 per cent of all UK residents’ overseas holidays and their market share is growing. ABTA’s own most recent market research, published in its 2019 Holiday Habits Report, shows that more than half of people took an overseas package in the year to July 2019. The statistics are conclusive – in terms of sheer numbers the package holiday is in rude health.
Is the package an old-fashioned product, struggling against more nimble, modern competitors?
There is undeniably a slightly snobbish preconception among some about the package – usually seen along the lines of two weeks in a slightly shabby high-rise hotel somewhere in the Western Med. Although the cheap and cheerful ‘flop and drop’ package still exists and is still popular, the modern package now also offers a vast range of holiday options and experiences, with the customer very much in the driving seat in terms of choice, flexibility and price-point. Packages can provide all of the benefits of independent arrangements, plus customer protection and support.
Do only “oldies” take package holidays?
ABTA’s research found that the age group most likely to take a package holiday are 18-24 year olds. Families and holidaymakers up to the age of 44 are also very keen. And the age groups least likely to take a package? The over 45s.
All in all a resounding rebuttal of the pretty vocal critics of the package.