The recent demise of Thomas Cook has been well documented. Thousands of passengers found themselves stranded abroad, and lots of customers that booked holidays are waiting a long time to get their money back.
It’s an event that’s shocked the aviation world, but what does it all mean for the holiday industry? We know the concerns that existing Thomas Cook customers face, but what about the future?
We have lots of questions, but the most prominent is; how will this saga affect the way we plan holidays from now on? There’s a lot to cover, and we’ve put this article together to go over some of the key considerations following the demise of Thomas Cook.
Should we change the way we book holidays?
Thomas Cook made its name by offering package holidays to consumers. It’s a simple idea; instead of booking everything separately, you book it all as one package. This way, you have your hotel, flights, and some activities, all sorted in one go.
The closure of Thomas Cook threw up some concerns about the way we book holidays. Should we continue to trust the package holiday system? Thomas Cook specialised in this, but they still went bust. Likewise, their main rival – TUI – is also in a lot of debt. So, on the face of it, it seems like package deals aren’t as big as they used to be.
However, many other airlines – like Jet2 – are introducing more and more package deals. There’s clearly still a market for this, and the demise of Thomas Cook may lead some airlines into being more cautious with how they run their business. Ironically, this saga could end up being beneficial for us in the future.
If you’ve never booked package holidays – because you prefer to get everything sorted separately – then this really doesn’t change much for you. Booking things separately can be beneficial as you often get a lower overall price. The downside is that it takes more time and effort. Not only that, but there are some insurance concerns regarding the way we book holidays.
How do package holidays affect insurance?
A key selling point of package holidays is that they are ATOL protected. ATOL stands for Air Travel Organisers’ Licensing, and it’s a scheme that’s been in place since 1995. Effectively, it demands that all tour operators fall under the regulations and rules for this scheme. In essence, it stops customers from being ripped off on package holiday deals.
What’s more, when something is ATOL protected, it means your money is protected in the event of insolvency. This means that, if the tour operator stops trading and closes down, then you can get your money back. This is the case for any package holidays bought, or for flights-only holidays bought through a tour operator.
As such, when you book a package holiday, you don’t need to get travel insurance with insolvency cover. But, you still need insurance to cover things like flight delays, lost baggage, and so on. Similarly, if you’re buying a flight from an independent flight operator, then they’re not ATOL protected. So, you’d also need to add insolvency insurance to protect yourself if the company folds.
What’s this got to do with Thomas Cook? Well, the good news for customers is that their money was covered by ATOL. In effect, it’s really shown us how important ATOL protection is in the holiday industry. Without it, thousands of customers would lose a lot of money, all because a company went bust and could no longer continue operations. So, if there’s anything positive to come from this saga, it’s that we know ATOL works and offer protection for package holidays.
In turn, these events should also make you more cautious when booking independent holidays. If you do like booking things differently, then make sure you explore all the insurance options to get the cover you need. This includes insolvency cover, which you won’t get through ATOL if the company doesn’t sell package holidays.
Will this saga leave a negative mark on the holiday industry?
Nobody likes to see a big company close down and leave many customers in tough situations, and many employees out of work. However, the events of the last few weeks have left a somewhat negative mark on the holiday industry as a whole.
You see, while Thomas Cook customers are ATOL protected, they’ve still been left in stressful situations. Some people still haven’t made it home because there isn’t any transport to get there. In turn, other airlines have pitched in offering help through alternative transport routes, but they’re charging a fair bit of money. Overall, the holiday rates actually went up during this time as people took advantage of all the existing Thomas Cook customers canceling future bookings and looking for alternatives. Yes, you can argue this is simply supply & demand, but it still leaves a sour taste in your mouth!
It certainly feels like this saga has made everyone more cautious when booking holiday packages. First of all, it’s shown how vital it is that you book package deals through ATOL protected companies! Secondly, it’s highlighted the complete lack of contingency plans when something goes wrong. We shouldn’t be in a position where it can take days or weeks for people to get home if an airline goes bust.
What should we take away from all of this?
In conclusion; should the demise of Thomas Cook change the way we book our holidays? We think it should, but only in the sense that you’re more cautious about how you book your holidays. Explore different options and see if you’re better off booking independently or through a tour operator. If you choose the latter, make sure it’s ATOL protected.
It really highlights the need to be fully insured. A lot of travellers are suffering because they didn’t get extra insurance on top of their ATOL protection. If you’re going to book a package deal, make sure you have additional insurance to cover things like flight cancellations, delays, hotel problems, and more.