The tourism industry needs to re-establish consumer trust in package holidays and ensure fairer business relationships in response to the Thomas Cook insolvency, top German managers agreed during an fvw round-table discussion.
Five senior managers – Sören Hartmann (DER Touristik), Gerald Kassner (Schauinsland-Reisen), Thomas Bösl (RT-Reisen), Paul Schwaiger (Condor) and Finn Ackermann (Iberostar) – accepted fvw's invitation to discuss the impact of the insolvency of Germany’s second-largest tour operator on the market and on consumers.
"We have to fight for the package holiday," declared Bösl, who heads the RT-Reisen travel agency group (as well as the large RTK network and the QTA mega-alliance of travel agency networks). "It's difficult to say how much the image of the package holiday has been damaged." According to various statistics, the organised travel industry (tour operators and travel agents) accounts for just over half of all German holiday bookings, with the other half made up of direct consumer bookings with suppliers or through online portals.
"We're not just talking about one company going bust, we're talking about the entire industry," admitted DER Touristik CEO Hartmann. But he stressed: "We're seeing the fate of one single tour operator, not the improper behaviour of an entire industry." The long-serving tourism chief defended the advantages of package holidays, which provide security for customers "not just in crises but also when something goes wrong". Hartmann also called on suppliers and travel agents to look more closely in future at which tour operators agreed fair payments and made them regularly.
Schauinsland chief Kassner also supported this argument, urging fair business practices between suppliers, tour operators and travel agents, and said travel agents should "recommend partners who are (financially) solid". But he accepted that steering sales towards tour operators had its limits. "When the price difference is too big, it doesn’t work. With a difference of 20, 30 or 40 euros, the cheaper offer wins," he commented.
Finn Ackermann, Global Commercial Director of Spanish hotel chain Iberostar, agreed that suppliers had to choose their tour operator partners carefully. It was a question of financial payments, seriousness and procurement practices. "As a solid hotel brand you have plenty of levers in your hand," he commented. "We're in the position of being able to select our tour operator partners." Iberostar had reduced its sales through Thomas Cook to just 15% of its overall capacity by broadening its range of tour operator partners in order to reduce its dependence on one single partner.
All the discussion participants agreed that the German tour operator insolvency insurance law would have to be reformed in the wake of Cook's collapse, which had shown that €110 million was far too low as an insurance sum. But opinions varied whether premiums should simply be increased or a new model was necessary.
Kassner warned against radical steps, saying: "Future premiums should not be too high for the market." Hartmann called for the financial situation of tour operators to be given more importance in future. "The higher the risk, the more the tour operator should pay," he said.
The tourism managers were united in their support for Condor, which is currently in talks with potential buyers, as an independent leisure airline. "It's important for Condor that we say that we want to have this product in future. That will give any future investor the necessary security," said Hartmann. "As an industry, we stand behind this airline and want to have it as an independent carrier."
Condor sales director Paul Schwaiger welcomed this support. "If we had not had the support of our major customers, sales partners and the public, then we would not have stood a chance," he admitted. In future, Condor wanted to sell capacity mostly through diverse tour operators with only a relatively small proportion of direct sales to consumers, he added.