PRE-INDEPENDENCE PERIOD:

The evolution of modern travel agency and tour operation in India is not as
old as the flourishing travel agency business in the Europe and the North
American countries. As there was no such formal and organized form of
travel related services, overseas travel agents exploited the vast potential of
inbound travel markets of India. The framework of modern travel agency
business in India was designed on the line of function and activities of
earliest group of travel agencies like Thomas Cook, Cox and Kings and
American Express. Those two UK based travel agents were well-experienced
to conduct round the world tour and special interest tours to different parts
of the world and more particularly, package tours were regularly conducted
to India for British officials and their family members and relatives. It was
the maiden attempt of Thomas Cook to take a pioneering attempt in
commencing the package tour to India during the visit of Queen Victoria to
Kolkatta after the end of the Sepoy Mutiny in 1858.
The success of the tour had made much impact in terms of safety and
security in India. Subsequent improvement of sea route connectivity
between India and the Europe opened a new avenue for providing safe,
comfortable and affordable journey. It was a matter of renewing
relationships between the uprooted families of British officials living in the
Europe and their counterpart living in India. Therefore, the prevalence of
travel brought people of India and the Europe together.
In 1878, Mr. Cook brought the first British Group of tourists to India by
taking support of the Peninsular and Oriental Steamship Company. The
group landed in Mumbai, traveled to Agra by train to see the Taj Mahal. In
the final leg of tour, the group visited Kashmir valley. The tour tuned to
become very successful and Mr. Cook gained confidence to set up offices in
India.
In the beginning, the Thomas Cook and Sons International (Ltd.) continued
the inbound operation in India with its main branches and offices in metro
cities. In 1880, Thomas Cook and Sons established offices in Mumbai and
Kolkatta as those two provinces were regarded as significant hubs of trade
and commerce. Considering the huge demand of royal families, the Eastern
Princess Department was also established in 1887 and that resulted in the
rise of outbound travelers to Europe. Thomas Cook took much care and
interest to arrange the sophisticated tour for India Princess to Queen
Victoria’s Jubilee Celebration. The outcome of the tour brought about
drastic changes in the perception of elite class people in India to plan leisure
trips to Europe.
A large chunk of the British, the French and other European nationals had
much greater interest to meet their friends and relatives in India and vice
versa. Many Europeans wished to undertake travel through sea routes to
India for visiting selected tourist places of interest such as the Taj Mahal,
Jammu & Kashmir, Shimla, Goa, Ajanta & Ellora, hill stations and beach
resorts. The unique attractions of India were blended with unprecedented
and exceptional history, exquisite art, architecture and sculpture, natural
scenic places above all, a land of wonders. It is in fact relevant to mention
that it was Thomas Cook which opened opportunities for taking travel to
India and more particularly, the company ensured travel to all places by
multiple modes of transport.
In the later period, people from other parts of the Europe were motivated
with the attractive and well organized package tours to India. A large
number of people in Europe had much fascinating perception and feelings
about India and its cultural and natural wonders. Towards the middle of the
19th century, a sizable number of young Indians sailed particularly to
England for pursuing higher study and appearing civil service examination
and in the later periods, Indian political leaders travelled to England to
participate several round table discussions on the solution for
socioeconomic and political issues. More particularly for the British
nationals, Thomas Cook got involved more actively in the inbound operation
to India for long period of time.
Thomas cook used to book train tickets, reserve government run guest
houses, arrange small car, mini coach, book horse carts and animal driven
carts to transfer the tourists from the railway station to their places of stays
and followed by conducting sightseeing tour in and around the places.
Thomas cook used to face the following obstacles for conducting tours in
India

 Lack of amenities and facilities such as road, bridges, railway

 Untrained staffs in the guest houses and other eating places.

 Cab drivers without having essential attributes worked for the travel
agents. Thomas Cook and other contemporary travel agencies were
also confronted with certain issues related with service factors. The
factors which were partly responsible for the depletion of the service
quality are as follows;

 Travel agents were not properly manned by the qualified and trained
manpower.
 Lack of technology was a vital bottleneck in the growth of travel
agency business.

 Lack of credit facility to the travel agent for the reservation of hotel
rooms and airlines tickets.
  Lack of diversification of business was also an important factor that
narrowed the scope of the expansion of opportunities for generation of
revenue.
 Lack of promotional measures was also another pertinent factor to
ensure higher growth rate in the travel agency sector.

Unlike in the Europe, the Indian railways system was much underdeveloped
in the context of integration with the travel agents and tour operators in the
promotion of inbound and domestic package tour. The issue has not been
addressed fully as yet. In the similar instance, the airlines had limited role
to work with travel agents and at the same time, there were not much
airlines connectivity with India. Because airlines were generally operated
within the domestic sky and countries did not venture for linking airline
services beyond the boundary of country for two important reasons like
political turmoil and low engine capacity for long haul journey.
The Indian Travel Agencies like Jeena & Co., Lee & Muirhead India Pvt. Ltd
and Jamnadas & Co. Ltd located at Mumbai and operated inbound and
outbound tours ventured into the so called sophisticated travel business.
Meanwhile Thomas Cook and American Express Co. were uploading the
inbound package tour business through Jeena & Co. and other
contemporary travel agencies. Howsoever it might be the business scenario,
Mr. J. N Katgara joined in the travel agency club in the world as the pioneer
travel agent in India. In 1920 the first travel agency was founded in the
name of Jeena and Company to cater to the domestic travel needs and the
operation of the company was mostly serving the demand of Mumbai.
As the cosmopolitan city was a major and busy port not only for arrival and
departure of passengers but also for the goods and the inflow of foreigners to
India was possible. Major trading centers were located in and round
Mumbai. Mr. Katgara capitalized the opportunities of the volume of business
and started looking into the cargo and courier business in the beginning
and in the due course, shifted to other components of travel related services
like ticket booking, hotel reservation, package tour, transport arrangements,
etc. The company along with other travel agents underwent massive
reformation and development in the post-independence period.
POST INDEPENDENCE PERIOD:
Even before the world war –II, the importance of tourism was well recognized
as a critical segment of economy. The outbreak of war stalled the progress in
the direction of tourism. The post-independence tourism development and
its bearing on the travel trade in India unveiled a new chapter in the annals
of Indian tourism scenario. The great concerned shown by the then colonial
Government to appoint a committee headed by Sir John Sargent in 1945
was a major step forward to fathom the potentials of tourism products
dotted across the country. After a thorough investigation, the committee
duly figured out the potentialities of developing tourist traffic in the country.
The committee in one its suggestions mentioned about the development of
means of travel from nearest railway station, residential accommodation,
travel brochures and guide books, provision of authorized guides, etc. that
should be provided at places both for the domestic visitors and foreign
visitors. The resultant impact was the formation of a separate Tourist Traffic
Branch under the Ministry of Transport in 1949 to deal with the task of
increasing tourist traffic to India. The tourist traffic section was mostly
entrusted the charge for coordinating with the travel agencies and tour
operators in India and overseas to augment the internal and external tourist
traffic. It also dealt with internal conferences on tourism, coordination with
railways, establishment of tourist bureau in States and development of
tourist centers and the training of guides.
Another most important action was taken to open a chain of tourist offices
both in India and abroad and Regional Tourism Offices were also opened in
Delhi, Mumbai, Kolkata and Chennai. The tourism offices located at
different regions and destinations coordinated and controlled various
segments of travel trade and ensured that the foreign tourists would get
various services at reasonable cost and would not be hassled at any cost.
There was a great leap forward when operation and functioning of eighteen
overseas tourism promotion offices formally started to display the tourism
potentials of the country. Those offices were based at countries and regions
from where maximum inflow of foreign tourists to India was originated. As a
result, overseas tour operators were encouraged to design itinerary and
package tour for India and in a regular interval, local and regional tour
operators held meetings with the India’s overseas tourism promotional
offices and sought all kinds suggestions related to the operation of tours,
booking of hotels, safety and security.
Foreign tour operators were also encouraged to participate in the
familiarization tour program in India and overseas tourism offices and Air
India hosted the tour with the purpose of introducing those places of
interest to them. Both tourism offices in India and abroad were equipped
with colourful brochures. Foreign tour operators were enthused to promote
package tours to India and the there was a steady increase in the tourist
traffic to India. In 1950, 17 thousand foreign tourists visited India when
there were no such overseas promotion offices or any promotional measures
taken for the increase of inbound tourist traffic.
The Travel Agents Association of India (TAAI) was formed towards the end of
the year 1951 by a group of twelve leading travel agents, who felt that the
time had come to create an Association to regulate the travel industry in
India. The primary purpose was to protect the interests of those engaged in
the industry, to promote its orderly growth and development and to
safeguard the rights of the travelling public. TAAI represents all that is
professional, ethical and dynamic in our nation's Travel related activity and
has been recognized as the voice of the Travel and Tourism industry in
India. With a membership data base of over 1800 Active; Allied and
Associate members comprising of IATA accredited Travel Agencies; Airlines
& General Sales Agencies; Hotels and Tour operators; TAAI is the largest
Travel Association of India.
Travel agency and tour operation business in India was relatively in the
preliminary stage in first phase of independence. Even after also, there was
hardly any travel company with full-fledged facilities. With the setting up of
the Travel Agents Association of India (TAAI) in Mumbai in 1951, the travel
business in India started in an organized manner. The Jeena and Company,
the first Indian Travel Agency organized group tours abroad and in India for
Indian travelers and it handled the first group of foreign tourists in 1950.
However, Jeena and Company and other two Indian Travel Agencies were
merged into one composite travel company known as Travel Corporation of
India Ltd. (TCI) in 1961. Moreover, the bulk of International tourists were
then handled by the Thomas Cook and Sons and The American Express.
Followed by the growth, there were a good number of travel companies
established in India such as SITA (1963), Thomas Cook India Ltd. American
Express, Cox and Kings, India Travel and so forth. As per the Foreign
Exchange Regulation Act (FERA) 1973, Thomas Cook India (Ltd.) was
established under the companies Act 1956 in 1978. The Asian games were
hosted in 1952 in India made a significant impact on the inbound traffic to
India. The scenario of travel trade stimulated by promotional measures
underwent remarkable change due to the rising number of tourist traffic.
From 1951 to 1961 travel agencies were banking on airlines tickets and
inbound operations to limited destinations. Travel agents started operating
at Delhi and other destination points like Agra and Jaipur. More particularly
travel agencies were resorting to the ticketing business and inbound tours to
golden triangle circuit.
Travel Agencies were facing the shortage of transport fleets to conduct sight
seeing tours in the cities. There was no such means to arrange different
transports to conduct sight seeing tours in the lesser known destinations. It
was certainly a challenging moment for travel agents which had business
plan to handle additional demand for the operation of package tour. In those
times, travel agencies had to take much time to confirm the booking of
hotels, transports, train tickets, guide services and other ground
arrangements to the clients. Scope of business was not expanding owing to
have limited operational network.
The concepts of tour through ground handling agents were not fully known
as there were very limited professionally skilled people to take the
responsibility of handling the tours. Presently, there are around more than
thousand travel agencies and tour operation companies on the approval list
of the Department of Tourism, Government of India. . These are located in
over 50 cities of the country and many have promotional offices in abroad.
In addition to this, there area large number of non- recognized travel
agencies scattered all over the country. In India there are more than 400
travel agencies which have been approved by the IATA and a number of
them have more branch offices. Following the report of ad-hoc Committee on
Tourism documented by the Jha Committee in 1963, that recommended the
role of public sector in the promotion tourism. Along with other two
corporations, India Tourism Transport Undertaking was set up in 1965 later
it merged with other two tourism public undertaking subsidiaries of
Government and gave birth to India Tourism Development Corporation
(ITDC) in 1966. ITDC was, in the beginning, fully geared up with the plans
and programs to development new infrastructure and strengthen the
existing facilities, resultantly, many such hotels were constructed at popular
tourist destinations and luxury transport facilities were also provided to the
tourists.
With the construction of hotels at many key destinations catered demand for
accommodation and restaurant facilities, which enhanced the total hotel
room capacity and ITDC associated travel agents and tour operators for the
booking of rooms on the basis of commission. Overseas tour operators were
completely apprehensive about the availability of rooms and other facilities
and amenities in the destinations. When ITDC hotel properties came up,
subsequently after, the apprehension was removed by the establishment of
ITDC properties. There was a surge in tourist traffic to India. The fact
remains that rooms, other facilities and amenities of ITDC hotels were at par
with the international star hotels that provided a kind of impetus and
confidence to Indian tour operators and foreign tour operators to conduct
package tours.
As the quality of rooms and transports are two significant components in
the package tour, so when those facilities were plentifully available at the
places of tourist interest, it is obvious that there were many tour operators
shown their interests to organize tours in India. Thus, the number of travel
agents and tour operators went on increasing and the business was treated
to be feasible and profitable. When accommodation and transportation
capacity were somehow manageable, overseas tourist promotion offices took
initiatives to showcase India to Europe in 1968 in a mass scale by launching
a promotional campaign in a very grand way. With the exposure of
introducing India to Europe campaign, the strategy for marketing India’s
tourism overseas underwent a significant change. In the later period, the
scheme was extended to UK in 1970 and to USA in 1971. However, overseas
tourism promotion was jointly sponsored and organized by the Department
of Tourism with Air India’s active participation and support. All those efforts
were translated into tangible results. The tourist arrivals registered a growth
from 17, 000 in 1950 188,820 in 1968. From the year 1965, there has been
a constant increase in the number of tourists visiting India and
International tourist’s arrivals also increased to 1329950 in 1990. The share
of India in the World tourism receipts has been varying between 0.64 per
cent in 1991 to 0.38 per cent over the last few years.
POST LIBERALISATION PERIOD
The expansion of business opportunities for travel agency and tour
operators depends on the active role of the governments to formulate certain
strategic objectives for the tourism development of sector. These strategies
comprise five key actions such as to position tourism as a national priority,
enhance India's competitiveness as a tourism destination, improve and
expand product development, create world class infrastructure and draw up
effective marketing plans and programmes. This growth-oriented strategy
indicates vast of opportunities for the travel agents and tour operators.
While travel agents are profiting from the tourist boom in the past couple of
years, a number of them also feel threatened and are worried about the
future. Commission cuts by airlines and the rapid technological
advancement, especially the increasing penetration and use of the Internet
has forced the travel agents community to rethink their business models
and strategy for not just growth but their survival in the future. Airlines and
hotels have turned away from intermediaries in the past couple of years,
preferring to invest heavily in their corporate sites and offer best-rate
guarantees in an attempt to woo e-tourists. In face of these commission
cuts, the main income generator, many travel agents are attempting to
diversify their operations by providing other services and also remodeling
themselves as travel consultants, a makeover, which happened in the
developed markets quite a while ago. Another recent trend, which is hitting
the small time travel agents hard, is consolidation in the travel distribution
network that has significantly reduced the number of travel agencies.
Currently the Indian travel industry is in the midst of a transition towards
becoming a mature market and the key words for all stakeholders are
adaptation and innovation. One way towards the future is adopting the idea
of service fee. This practice highlights the advisory role of the travel agent as
a professional or a consultant where clients pay for the agent's expertise
instead of suppliers having to pay a commission. The role of a consultant
dovetails nicely with the trend towards customized travel.
Indian tourists today are well traveled and want to enjoy a certain freedom.
They want to go beyond the beaten path, yet enjoy the benefits of a hassle
free planning and expertise proffered by a travel agent. This means that
agents must have the flexibility needed to offer customized travel products.
Apart from changing their business models to meet the challenges of the
future, travel agents and tour operators also have a wider and important
role to play in the development of tourism. They can coordinate with the
Ministry of Tourism and other related central and state ministries in their
endeavor to improve facilities, guaranteeing safety and security of tourists
and disseminating information.

Besides this, travel agents and tour operators also need to establish
channels of communication and liaison with the department of tourism,
state and other public and private bodies and take all necessary steps to
promote and develop tourism in India, while also promoting environment
protection, cultural exchange and national integration. The challenge for the
travel agent and tour operator community is also to formulate a uniform
code of conduct to govern the procedure of booking, confirmations,
payments, refunds, cancellations, no-shows, changes, pre ponements and
postponements, retention charges, commission and discounts.
TRAVEL INTERMEDIARIES IN INDIA
In order to encourage quality standards and services, the Ministry of
Tourism approves travel agents, tour operators, tourist transport operators
and adventure tour operators in the country. As on 31st Dec.2003,186
travel agents,340 tour operators, 154 tourist transport operators and 13
adventure tour operators are registered with Ministry of Tourism.
CHANGING ROLES OF TRAVEL AGENTS AND TOUR OPERATORS
Traditionally, in the Indian market the travel agent acted as an intermediary
that brings travel products to the end consumer. Travel agents used to
receive a base and override commission. Pay-forperformance override
commissions are now typically only available to large travel agents. The
bigger the travel agency, more sales can be drawn to the airline paying the
override. This revenue stream is generally not available to the small travel
agents, who do not have a significant impact on an airline's market share.
With the airline commissions diminishing fast, the agents who survive and
grow will be those who embrace technology and implement alternative
revenue streams and service fee concept. Apart from ticketing, travel agents
are beginning to offer services like travel insurance, hotel bookings.
Although package tours remain an industry staple, tour operators will need
to develop more flexibility in the creation of holiday packages to serve the
growing selfservice segments. Whether catering for the inbound, outbound
or domestic markets, tour operators seem to have been the most forward
thinking in their efforts to innovate in their products and services.
Thomas Cook India has recently decided to focus strategically on the travel
business for augmenting future growth, which include hiving off financial
services into a separate outfit. KUONI travel company SOTC outfit in India is
looking for mergers and acquisitions for SITA-Inbound Division in terms of
specialized markets like adventure tourism, incentive tourism and
convention tourism. The travel business in India is segmented into: a)
leisure; b) business; c) inbound and domestic; and d) employment/migrant
travel. Business travel has stabilized at a growth rate of 10-15 per cent per
annum. With increasing disposable incomes and lower costs, leisure travel
-- both domestic and, to a larger extent, outbound travel -- is experiencing
an upward trend at 30 per cent. Inbound travel is still fraught with
infrastructural problems. SITA Inbound is growing at 15 to 20 per cent per
annum. The formula for a merger is that the merging companies should
have a product fit, a price fit and a people fit.
INDIA’S OUTBOUND AND INBOUND GROWTH:
The outbound market is surging ahead due to the drastic fall in the
international airfares, liberal open sky policy, increasing disposable incomes
of consumers and aspiration to travel abroad increasing, as for the inbound
traffic, India definitely has a bright future to look at. The recent government
initiatives such as the Incredible India campaign, Athithi Devo Bhava
campaign and Lonely Planet rankings etc have made India a very popular
country. The FIT market is growing at a rapid pace and the profit margin
varies between 70 per cent and 80 per cent. India expects about five million
overseas visitors this year, as outsourcing cities like Bangalore and
Hyderabad draw more business travellers.
The government is trying to improve airports in New Delhi and Mumbai, two
of the busiest airports, through private participation. The modernization of
airports and licenses for new budget airlines are part of the government's
effort to attract more travellers to India. World Travel & Tourism Council of
London expects India to be the third-fastest expanding tourism market in
the next decade. The entry of new airlines has pushed down fares by about
25 per cent in two years. Indian hotel companies added 1,200 luxury rooms
in 10 cities and vacation destinations like Goa, taking the five-star category
of accommodation to 24,000 rooms by the end of 2006. The addition of hotel
rooms coincided with the increasing frequency of flights by British Airways,
Lufthansa, Singapore Airlines and Qatar Airways mainly.
International passenger traffic at Indian airports rose 17 per cent to 19.41
million in the year 2007. Existing travel agencies are being replaced by self-
serve travel Web sites on the Web and thus facing the following challenges.

 Revenues from ticket sales are shrinking

 Profitability is becoming harder to maintain.

 Middle and upper class travelers require more services than bargain
travelers.
A CASE STUDY OF KUONI: You look at the world. We look after you.
Kuoni-India's key Outbound Division operates under the name of SOTC is
the country's largest outbound tour operator. SOTC has escorted over
350,000 travellers across the globe to various destinations including
Europe, Australia, New Zealand, USA, Africa, Mauritius, South Asia, and the
Far East.
SOTC has a wide distribution network of 130 sales outlets across India to
retail its range of products and serve its customers better. The flagship
brand of SOTC, pioneered the designing and marketing of escorted tours to
cosmopolitan travellers in India. Sport Abroad provide global sports-based
holidays whilst Student Holidays strives to enrich the educational
environment through travel and fun-filled experiential learning. SOTC Do-It-
Yourself Holidays provides customized fully flexible holidays that cater to
seasoned travellers. SOTC is also known for the domestic holiday brand
which offers a wide range of organized domestic travel options across India,
namely, Classic Holidays, Fun-filled Beaches, Hill Stations, wildlife Holidays
and Spiritual The outbound travel division of Kuoni (India) has a 66 per cent
share in the outbound-travel business in India.
At least 60,000 to 70,000 Indians visit international trade fairs every year
and small and medium entrepreneurs consider such visits as a business
investment. Germany organises the largest number of these trade fairs,
followed by Italy (Milan), China, France and Japan. The major trade fairs in
Germany often attract 1.5 lakh visitors every year. The leading source of
India’s outbound travellers is Delhi and it shares covers somewhere at 26
per cent.
TIMELINE IN THE DEVELOPMENT OF TOURISM WORLDWIDE:
In the late 17th and 18th Century, the Grand Tour was a kind of education for
wealthy British noblemen.
In 1758, Cox & Kings became the first travel company in modern history.
In 1822, Robert Smart of Bristol, England, announced himself as the first
steamship agent. He began booking passengers on steamers to various Bristol
Channel ports and to Dublin, Ireland.
In 1825, Railways were first introduced in England and the first train started
between Liverpool and Manchester.
In 1840, the Abreu Agency was established in Porto by Bernardo Abreu, becoming
the world's first agency to open its services to the public.
In 1841, Thomas Cook, a Baptist preacher who believed that alcohol was to blame
for social problems, reached an agreement with the Midland Railway to organize
the transportation of 500 members of his temperance movement from the Leicester
Campbell Street railway station to a rally in Loughborough in exchange for a
commission. He formed Thomas Cook & Son, which later became The Thomas
Cook Group. It filed bankruptcy and underwent liquidation in 2019.
In 1871, Dean and Dawson was founded in the United Kingdom and in the 1950s,
it was acquired by Thomas Cook.
In 1870, the Polytechnic Touring Association was founded in the United Kingdom.
In 1887, Walter T. Brownell established Brownell Travel, the first travel agency in
the United States, and led 10 travelers on a European tour setting sail from New
York on the SS Devonia.
In 1895, Baldwins Travel was founded by Alfred K Baldwin, originally a printer,
bookbinder and publisher in Tunbridge Wells. Baldwins begins selling railway
tickets and helping friends to travel to Europe and beyond. News spreads and the
former printers slowly build a strong side–line in travel at the back of the Baldwins
Stationery shop at 27 Grosvenor Road.
Originally, travel agencies largely catered to middle and upper–class customers but
they became more commonplace with the development of commercial aviation.
In 1905, Nippon Travel Agency became the first travel agency in Japan.
In 1918, Deutsche Lufthansa provides the first scheduled air passenger service
from Berlin to Leipzig and Weimar.
In 1923, after being treated badly by a British travel agency, K. P. Chen formed
what became the China Travel Service, the first travel agency in China.
The industry suffered during World War II. However, the Post–World War II
economic expansion in mass–market package tours resulted in the proliferation of
travel agencies catering to the working class.
In 1929, Intourist was formed as the official state travel agency of the Soviet Union,
with the goal of convincing outsiders to visit the country.
In 1945, the end of World War II and the beginning of the era of mass tourism.
During the Cold War, travel agents were used by people from Western countries to
travel behind the Iron Curtain.
In 1951, the precursor to Hello World Travel became one of the first travel agencies
in Australia.
In 1955, Henderson Travel Service became the first black–owned travel company
and the first to take large groups of black tourists to Africa.
In 1963, the SITA World Travel (India) Ltd. Was established by Inder Sharma. In
the early 1980s, American Airlines' Sabre unit created a direct–to– consumer
booking tool for flights, hotels and cars called eAAsySabre.
In 1989, with the liberalization of travel for South Koreans, Mode Tour became the
first travel agency in the country.
In 1991, Hotel Reservations Network, the precursor of Hotels.com, was founded. At
first, hotels did not pay much in commissions.
With the advent of the internet, travel agencies migrated online and underwent
disintermediation by the reduction in costs caused by removing layers from the
package holiday distribution network.
In 1994, Travelweb.com launched as the first online directory of hotels.
In 1995, Internet Travel Network sold the first airline ticket via the World Wide
Web.
In October 1996, Expedia.com, funded with hundreds of millions of dollars by
Microsoft launched as the first large online travel agency. At the same time, Cheap
flights started as a listing service for flight deals from consolidators.
In 1997 Thomas Cook On–Line is launched. It's the first UK retail travel agency to
offer customers a way to buy holidays, foreign currency, travellers checks and
guidebooks online. In 1998, Lastminute.com was founded in the United Kingdom.
In 1999, European airlines began eliminating or reducing commissions, while
Singapore Airlines did so in parts of Asia.
In 2002, several airlines in the United States did the same, which led to an
unsuccessful lawsuit alleging collusion among the airlines that was decided on
appeal in 2009.
In 2003, the newly branded Thomas Cook Airlines is officially launched in the UK.
In 2007, Thomas Cook AG and MyTravel Group plc merge to form Thomas Cook
Group plc, bringing a stronger Nordic focus with the incorporation of Ving, Spies
and Tjäreborg.
In 2007, the launch of the iPhone and related mobile apps increased travel
bookings made online.
In 2008, the launch of Airbnb created an online marketplace for spare bedrooms
and apartments.
In 2011, the launch of Hotel Tonight highlighted instantaneous same–day hotel
room booking.
In 2015, Thomas Cook Group plc announces a new partnership with Chinese
investment group Fosun International Limited.
In 2019, December outbreak of Covid–19 and ban on international travel started
across the globe.
In 2021, travel agency Baldwins Travel Group, which was founded in 1895 was
bought by business group Inc & Co.
CASE STUDY
Reasons Behind the Thomas Cook Bankruptcy
Thomas Cook Group was a British travel company which operated as both, an
airline company and a tour and travel firm. The Group was founded after the
merger of Thomas Cook AG and My Travel group in 2007.
However, the brand "Thomas Cook" is 178 years old and was trusted by travellers
globally. Recently, Thomas Cook Group collapsed due to a lack of funds. They have
announced their bankruptcy. We tried to find out what were the reasons behind
the Thomas cook bankruptcy case.
News about Thomas Cook Bankruptcy Case
Thomas Cook Group collapsed on Monday, 23 September 2019. This caused
22,000 losing their jobs which include 9,000 people from the UK. More than
150,000 travelers who were on holiday, lost their trip home.
On 26 September 2019, the British Civil Aviation Authority (CAA) announced that
they have scheduled over 70 flights on Thursdays (26 September) to bring back
16,000 travelers who were on their holiday to different countries. Their program
would continue until 6 October. They have more than 1000 flights planned to
schedule for 10 days.
History of Thomas Cook Group
Thomas Cook Group is the oldest travel agency in the world which was founded in
1841. Thomas Cook founded the company by helping people travel by train. He was
a part of the Temperance Movement (A movement against Alcohol) and arranged
meetings for the movement and carried temperance supporters from one British
City to another.
At the same time, he founded the Thomas Cook Travel Agency and worked as the
middle man for the travellers. Around 1860, the company was arranging foreign
trips and was the first one from the country to take people to the US & Europe. It
even arranged many world tours for travellers.
When Thomas Cook was succeeded in arranging many trips, he became sure about
this business and bought a shop on Fleet Street, London, and started selling travel
accessories along with travel arrangements. In 1872, Thomas formed a partnership
with his son and renamed the company to Thomas Cook & Son. Thomas' son, John
Mason Cook provided expertise for the commercials of the company.
Thomas retired in 1878 and John Mason and his son were now responsible for the
business. By 1888, the company was able to establish its offices in various
countries. By now, the company was developed in terms of its services. They were
able to arrange many activities in other countries for their travellers like Opera,
Mountain climbing, etc.
The company then ran by the family members only and remain the same until
1924 when it was renamed to "Thomas Cook & Son Ltd." after getting limited
liability status.
The third generation of the family was even more successful as travel became more
popular. However, the company was sold to Hays Warf Cartage Company in 1942.
After few decades, it was then acquired by the British Government and was
renamed to "Thomas Cook Group Ltd.

Between 1974 to 2001 Thomas Cook Group Ltd. was acquired by many companies
until C&N Tourist AG acquired it and renamed it to "Thomas Cook Group AG".
Later in 2007, Thomas Cook Group AG was merged with My Travel Group to form
"Thomas Cook Group Plc".
Reasons Behind Thomas Cook Bankruptcy Case
Why Thomas cook failed? Some of the reasons which led to the failure Thomas
Cook Group and caused Thomas cook bankruptcy case are:
Funding
The major and the most obvious reason for the collapse of Thomas Cook is that
they were not able to secure the funding of £200 million or almost $250 million. If
the company would have received the amount of funding, it could have easily
survived instead of getting bankrupt but due to lack of funding led to the Thomas
cook bankruptcy case.
The Debt
Thomas Cook had a debt of over $2.1 Billion. It is the reason the investors backed
out of investing in the company. The bosses of Thomas Cook even met many
lenders and creditors in London but failed to raise any funds. Again investors
backed which led to the Thomas cook bankruptcy case.
The Model
The business model of a travel agency depends on segregating the different aspects
of travelling and packing it into one travel package. However, with the easy and
direct access to any service through the internet, the travel package, or going
through a travel agency has become obsolete.
Airline Expenses
Thomas Cook was a service travel company that even provided flights to travellers.
However, operating an airline is not an easy task. An airline company needs a lot of
funds to bear its running cost. Costs like fuel, maintenance, crew, etc. need to be
fulfilled.
Brexit
The company is calling it the top reason for the collapse. In May 2019, the CEO of
Thomas Cook, Peter Frankhauser said: "the Brexit process has led many U.K.
customers to delay their holiday plans for this summer."
And of course, one reason for its failure is the common reason for most of the
business failure, resisting change. Thomas Cook was unable to adapt the changes
according to the new generation and ended up collapsing.
Why Thomas Cook India is Safe?
Even though the whole world is shocked by seeing the 178 years old company
collapsed, Thomas Cook India is still doing business as always.
The reason behind it is that Thomas Cook (India) Ltd. was acquired by Fairbridge
Capital Ltd. is a subsidiary of Canada–based company, Fairfax Group.
Hence, Thomas Cook India is totally safe and still operational. However, they have
put this warning to let the users know that their company is independent of the
brand of Thomas Cook.
Even though Thomas Cook India is still operational, they have seen a sudden
downfall in their share price. Their share price decreased by 5.23%.
Conclusion
Thomas Cook has been a great business since its birth. The company changed the
way people travelled. In the age when it was a luxury to travel to another city, the
company made it possible to easily travel to other countries. Along with its travel
business, it has also been a great financial company for travellers.
However, everything has an end. So, it is an acceptable truth and not a surprise
that the company ceases to operate anymore. Even though the travel industry has
grown as a whole, but it has also evolved in the process. So, if any company has to
survive in any industry, they need to adapt change according to the generation.