Tour company tui heading for collapse
When Thomas Cook collapsed, all the signs were there it was in serious trouble, thus when the collapse finally came it was no surprise.
All the signs are there with tui, huge debts, before covid-19 a debt of €2 billion, losses of €845.8 million for the first half of the year.
There are though big differences between the two companies, Thomas Cook did not have the poor reputation of tui, people were actually going on holiday.
Were it not for a €1.8 billion bailout from Germany in the form of a loan (which must be repaid by 2022) tui would have already collapsed.
Tui plans to cut 8,000 jobs and cut fixed costs by 30%. Chief executive Friedrich Joussen said tui was burning through cash at a rate of €250 million a month, despite recently cutting costs by 70%.
Tui has been offering non-existent holidays which are then cancelled. Fools and their money easily parted. Hassle to then obtain a refund.
Anyone thinking of booking a holiday with tui should think again.
Major problem for hoteliers especially those who signed exclusive contracts with tui.
Hotels must move way from reliance on tour companies, limit to less than 20% of occupancy, no one tour company more than 10%, payment end of every month.
It is now so easy to book direct. Everyone has a smart phone, tablet, baby laptop, laptop, computer, connected to the internet 24 hours a day.
Hotels should be seeking direct bookings, offering good deals to their regulars. Hotel associations together with government tourism bodies establishing open source open coop platforms to facilitate direct bookings, charge a nominal fee to maintain the platform, any surplus used to fund environmental projects.
Mass tourism has trashed the planet, spread covid-19 around the world.
We must move away from mass tourism, ban all-inclusive hotels which are killing local economies, fewer tourists, longer stay, quality tourists, not the dregs that companies like tui deliver to hotels.
Tourism has to be sustainable, benefit all of society.
Doughnut Economics: Amsterdam with the help of Kate Raworth has developed a post-pandemic recovery programme, Doughnut Economics Amsterdam. A draft proposal has been drawn up for Cyprus focusing on the tourist sector, Doughnut Economics Cyprus.
Any recovery programme has to be distributive and regenerative.
Collapse of tui would be good news for the industry.
There used to be four big tour companies operating in the UK which dominated the industry, Thomas Cook, Airtours, Thompson and First Choice, then there were two, Thomas Cook and Airtours merged, Thompson and First Choice merged. Then there was one, Thomas Cook collapsed leaving only tui. Tui now controls not only tourists from the UK, from the whole of northern Europe, which is not a healthy position for the industry to be in.
Travellers and hoteliers need to move rapidly to direct booking to safeguard against and hasten the inevitable collapse of tui.
