Chinese travel firm Fosun Tourism Group has announced plans to expand the business of Thomas Cook once the global economy recovers.
Fosun Tourism, which took over the brand assets of Thomas Cook late last year, forecasts the travel industry to have a strong recovery once a vaccine is completed.
The travel group relaunched Thomas Cook in China last July and described the initiative as a success, garnering more than 170,000 customers. It is scheduled to do a relaunch of the brand in the UK as an online travel agency and said this is only “phase one”.
The fall of Thomas Cook
Thomas Cook reported a loss of £1.5 billion for the first half of 2019 and has issued three profit warnings as it struggled to reduce its debts. It attributed the loss to political unrest in holiday destinations such as Turkey, prolonged heatwave during the summer of 2019 and customers delaying booking holidays because of Brexit.
In September of last year, the travel company announced that it is searching for additional funding of £200 million to avoid falling into insolvency. Banks, including the Royal Bank of Scotland and Lloyds Bank, have asked Thomas Cook to come up with new contingency funds to avoid insolvency.
During that time, Thomas Cook employed 22,000 staff, 9,000 of those are in the UK, caters to 19 million customers annually in 16 different countries. Worried customers were contacting the company to check whether their flights and tour packages are still pushing through.
The company eventually entered compulsory liquidation before the month ended after last-minute deals aimed at rescuing the company collapsed.
According to the UK Civil Aviation Authority (CAA), Thomas Cook has started compulsory liquidation and has “ceased trading with immediate effect”. The collapse of the company left over 150,000 British holidaymakers stranded overseas.
Peter Fankhauser, chief executive officer of Thomas Cook, called the company’s collapse as a “matter of profound regret” and apologized to the firm’s “millions of customers, and thousands of employees” following the announcement of the compulsory liquidation. The company’s failure placed 22,000 employees at risk globally, including 9,000 in the UK.
Fosun’s positive outlook for Thomas Cook
Fosun Tourism Group chief executive and chairman Jim Qian said: “In China, Thomas Cook has been relaunched as more than just an online travel agency. Instead, it is a lifestyle platform which offers a range of related products and services.”
The platform includes hotels, tickets, entertainment, education and retailers selling gifts and souvenirs, as well as a delivery firm to help holidaymakers transport bulky purchases back to their home.
Qian added: “We launched as an online travel agency first in the UK but we want to add more and more so it becomes a similar platform. It was a soft launch to test the process and make sure things are working well ahead of a full recovery. We will gradually add more products on this platform.”
Fosun also plans to launch several bricks-and-mortar stores under the Thomas Cook brand, beginning in Shanghai in early 2021. Qian pointed out that while the stores will be “multifunctional and more than just travel agencies”, they will not be on a large scale.