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As Brexit Proceeds, Thomas Cook Tells Brits to Bunk With Germans

Published on Mar 31 2017 11:07 AM in General Industry tagged: Germany / tourism / thomas cook / Brexit / Majorca

As Brexit Proceeds, Thomas Cook Tells Brits to Bunk With Germans

As Prime Minister Theresa May formalized the UK's decision to quit the European Union, the country’s biggest tour operator had a message for Britons: On holiday, you’ll now be bunking with Germans, Swedes and a host of others from across the continent.

Thomas Cook Group is abandoning a decades-old policy of assigning different nationalities to specific hotels in popular areas such as the Spanish island of Majorca after a survey showed that the bulk of its clients would be happy to vacation with a more diverse cross-section of other travelers.

“We’ve exposed a myth that Germans want to be with Germans and Brits with Brits,” Chief Executive Officer  Peter Fankhauser said in a briefing in London, where the company is based, hours before May pressed the Brexit button. “It seems most people are now willing to mix, if the mix is right.”

Thomas Cook, which has units in Britain, Germany, Scandinavia and Belgium, polled 18,000 customers in all four countries, with 90 percent in each saying they’d have no issues rubbing shoulders with sunseekers beyond their own countrymen. The company plans to ensure that no single nationality accounts for too great a proportion of a hotel’s occupants, with the mood lightened by a sprinkling of Nordic travelers - viewed as the most friendly - where needed.

Towel Wars

The move suggests Britons have become less paranoid that early-rising Germans might “reserve” the best sun-loungers with strategically placed beach towels, and that continental tourists no longer view U.K. travelers as boorish beer swillers. For Cook, it offers a better way to maximize occupancy levels amid a shortage of rooms in its most popular destinations. Capacity is at a premium after a spate of terror attacks in Turkey and north Africa focused demand on already crowded resorts in Spain and the western Mediterranean.

As part of the revised approach, the world’s oldest holiday company has widened the distribution of breaks sold via two Nordic brands, Sunwing and Sunprime, as it seeks to leverage an element of “Scandi cool” to lure more-affluent clients from across Europe to its package holidays, Fankhauser said.

Family-oriented Sunwing has a portfolio including the Ocean Beach Club hotels in the Canary Islands, Crete and Cyprus, each with a gym, spa and free wifi, plus the Lollo & Bernie children’s playground and a Teen Lounge with free game consoles and movies.

Melting Pot

Sunprime specialises in adults-only lodgings. The brand’s Monsuau hotel on Majorca’s east coast was previously limited to Scandinavian visitors but has been opened up to the U.K. and German markets and is getting some of the best customer-feedback scores in the group, according to Thomas Cook.

Fankhauser said old demarcations may still be appropriate in resorts such as Magaluf, western Majorca, known for its popularity with British bachelor parties and profusion of Irish-style pubs and fish-and-chip outlets.

Thomas Cook is also establishing a new range of own-brand hotels under the Casa Cook banner, the first of which opened on the Greek island of Rhodes last year, with the second undergoing construction on nearby Kos. About 90 percent of customers are new to the company, according to Fankhauser.

Brexit remains an issue for Thomas Cook, with the slump in the pound following last year’s referendum leaving Britons with fewer euros in their pocket once they get overseas. Some people who would once have booked a two-week break are now vacationing for 10 days instead, Christoph Debus, who heads the group’s airline operations, said in an interview.

Terror Impact

Cook, which attracts about 22 million customers a year, is continuing to grapple with the disruption caused by terrorism, something Fankhauser described as the “new normal.” The company must be able to quickly shift capacity when necessary, he said, and with Spain struggling to accommodate more visitors, Greece, Bulgaria, Croatia, Cyprus and Portugal are among destinations to see a surge in bookings.

While throwing Brits and other Europeans together is one way to address a tougher tourism market, Thomas Cook is also looking to make better use of its airline assets to improve group earnings that slipped 3 percent last year.

The company said Thursday that its Belgian carrier, which operates only five of its 94 aircraft, will be dissolved and staff and planes moved to the local arm of Deutsche Lufthansa AG, which will takeover provision of holiday flights.

About half of passengers using Thomas Cook’s airlines do so on a flight-only basis, a figure that jumps to 90 percent on long-haul routes. The company has taken delivery of 25 Airbus Group SE A321 jets to replace aging Boeing Co. 757-200s and is examining a role for the long-range LR version of the revamped A321neo, Debus said. It also operates Europe’s sixth-largest wide-body fleet.

News by BLoomberg, edited by Hospitality Ireland

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