Thomas Cook Sells Off Canada Franchise Network

Thomas Cook’s franchise network in Canada was acquired last week by Transat Distribution Canada (TDC). The deal encompasses 100 franchised Cook agencies in Canada and gives TDC a total of 600 agencies with 3,000 travel counselors.
 
Thomas Cook will continue to operate its owned and licensed retail network including the Thomas Cook-branded agencies, Belair Travel, Wholesale Travel Group, Last Minute Club and Sears Travel.

The majority of the former Cook franchisees will join TDC’s TravelPlus network in English Canada and Voyage En Liberte in Quebec. Thomas Cook Lite program members will become a part of the TDC Affiliate network.

TDC’s strategy
“The acquisition of the Thomas Cook franchisees and affiliate network supports our strategy to grow our controlled distribution channel and continue to be a welcoming host to an ever-growing base of customers,” said Yves Lalumiere, president of Montreal-based TDC.

TDC’s purchase also reflects its outlook for a strong future for Canada’s travel agents, vice president Susan Bowman told Travel Market Report.

Recent consumer surveys have shown that Canadians purchase most of their vacation travel, including cruises and land packages, through travel agents, because they want a professional counselor to cut through the Internet clutter, she said.

TDC’s retail travel franchises are part of a vertically integrated travel company that has nine business units, all in travel and air transportation.

The expansion makes TDC “formidable when we represent our needs to the suppliers and allows us to operate programs more cost effectively with the scale to support continued investment,” Bowman said.

Focusing on core strengths
Thomas Cook agents contacted by Travel Market Report said they did not want to comment until they heard a presentation from TDC this week.

But Patrick Luciani, president of Ontario-based Travel Only, said of the news that “it is a good deal for both sides. Both realize where their strengths are.”

Luciani, whose firm encompasses 500 agents across Canada, said the development reflects a retail travel industry that is adjusting its business models in the face of high operating costs for traditional storefronts, while coping with the impact of social networks and mobile technologies.

In Luciani’s view, Thomas Cook’s strategy is to regain market share in Canada by concentrating on core competencies — its more profitable tour and cruise brands. Cook’s affiliates program required a lot of work, he said.

Noting the high-cost of running storefront agencies, Luciani predicted that TDC eventually will move the Cook affiliates to less-costly home-based business models.

Growing its retail network
TDC said it sees opportunities for growth in retail travel by focusing on the full-service professional travel consultant.

“The continued growth in this network is a result of dedication and commitment to the financial health of all members. The focus is on a full suite of value-added benefits and in consultation with members . . . sound business management advice and guidance that has proven results,” TDC said in a statement.

TDC has operations in Canada, France, the U.K., the Netherlands, Greece, the U.S., Mexico and the Dominican Republic.

Churn in Canada
The selloff by Thomas Cook came just one year after American Express severed ties with its independent travel agency affiliates in Canada. The move by American Express, which was effective July 31, 2011, affected 50 Canadian members of its Travel Partner Network.