Global Experience Industries. Jens Christensen
a process of consolidation along with other tour operators. By its merger with MyTravel in 2007, Thomas Cook becomes one of the two worldwide leading tour operators. Most of its total $16 billion sales lie in Western Europe, with Germany and the UK being the two predominant markets. Thomas Cook comprises many firms within most parts of the travel value chain, including tour operators and their subsidiaries, travel agencies, airlines and hotels. The economic crisis of the early 2000s, forced Thomas Cook to carry out a radical reorganization process similar to other large tour operators. Focus is strengthened on its core business by introducing the dynamic packing strategy, by replacing much capital bindings with third-party purchases, and by upgrading the use of the Internet as sales channel. In this way, Thomas Cook is to a higher degree turned into a distribution company where customers, via its website, can book and buy travel, accommodation, car rental, etc.
With annual revenues in 2007 of $5.5 billion, the acquired travel corporation MyTravel is one-third the size of Thomas Cook.62 60 percent of its sales stem from the UK, 25 percent from Scandinavia and 15 percent from North America. By merging with the two large Scandinavian tour operators Spies and Tjaereborg in the 1990s, MyTravel creates also a stronghold in Scandinavia. As a result of deficits in the early 2000s, MyTravel sells most of its airline fleet and reorganizes according to the dynamic packaging strategy and use of third-party providers. MyTravel complements Thomas Cook in its main markets making Thomas Cook a market leader in the UK and some other European countries.
In 2006, merged Thomas Cook and MyTravel have combined annual revenues of $21 billion, Thomas Cook 16 $bn and MyTravel $5 bn. The Thomas Cook Group is no. 1 in the UK, France, Scandinavia and Hungary, and no. 2 in Germany (after TUI and closely followed by REWE), Poland and Austria.
REWE
German REWE is part of a large retail corporation.63 Since the turn of the 20th century, REWE’s tourist division has expanded much and is now the third-largest European tour operator. By way of acquisitions such as the DER Group and the LTU Airline, including Jahn Reisen, it reaches revenues of $5.5 billion in 2007, just 10 percent of the total revenues of its mother group.
Kuoni
Swiss Kuoni has taken almost the same road as REWE, becoming the fourth-largest European tour operator with 2007 revenues of $4 billion.64 Unlike the other European tour operators, however, Kuoni mainly offers intercontinental tours to Africa, South East Asia and Central America, but it is expanding increasingly in European travel, too. Until the 1990s, Kuoni was primarily a Swiss based company, but then launched an international expansion that made it one of the consolidating companies of the tour operator industry. Kuoni expanded in North America, Asia and Europe, including its neighbouring countries and Scandinavia.
Business Travel Agencies
Carlson Wagonlit
Together with American Express and BCD, American Carlson Wagonlit (CWT) constitutes the world’s three leading business travel agencies.65 CWT is part of the larger Carlson Companies. Since the 1960s, and especially during the 1980s and 1990s, Carlson Companies expanded by several acquisitions in more and more parts of the tourism value chain, mainly in business travel. In 1997, when the Carlson Travel Group merged with French Accor’s Wagonlit Travel and formed Carlson Wagonlit Travel, it created the first truly global business travel agency with three thousand offices in one-hundred-and-fifty countries. Carlson Companies includes two other travel subsidiaries, Carlson Leisure Travel Services, including many travel agencies, tour operators and cruise lines, as well as Carlson Hotel Worldwide, for example the hotels of Radisson and Friday’s. The total travel business revenues of Carlson Companies amounted to $20 billion in 2007.
American Express Business Travel
Since the mid-19th century, American Express has been a leading American company of money transportations and money transfers.66 During the 20th century, American Express began to organize business travel and to a minor degree holiday travels, including cruise lines. Electronic cards are a third business area which has developed since the 1960s. American Express had total revenues of $27 billion in 2007.
BCD Travel
TQ3 is a business travel agency equally owned from 2004 to 2006 by TUI, the world’s largest tour operator, and Navigant International, the second largest US business travel agency.67 TQ3 had revenues of $10 billion in 2005, doing business in 80 countries. While Navigant kept its share, in 2006 TUI sold its part to Dutch BCD. Simultaneously, BCD changed its strategy from being a business travel organizer to becoming a global travel logistics provider. BCD is the third largest business travel agency (next to American Express and Carlson Wagonlit) with revenues of $12 billion in 2007 and activities in almost one hundred countries. The merger has made BCD market leader in several European countries, including Germany, Benelux and Denmark, and among the top five in USA, UK and Italy.
Cruise Lines
Cruise vacations have become a popular way of spending a holiday.68 A cruise is an all-inclusive holiday on board a large ship, including stopovers at different ports of call. All kinds of entertainment and comfort are found on board the ships, including delicious food, good music and dancing, swimming pools, sports facilities, cinemas, gaming, wellness facilities, medical care, etc. all of which are meant to give you good experiences in company with hundreds of people, mostly middle aged and older.
Like most other tourism sectors, cruising developed in the US before it spread to the rest of the world.69 For decades, Americans have been able to take cruises to the Caribbean, along the North American West coast up to Alaska, to Hawaii, the Far East and Europe. In the 1990s, cruise lines were introduced to Europe, too. Norwegian, German, British, Dutch and Italian shipping companies began investing in cruise ships and started to organize trips for Europeans around the Baltic coasts, along the Norwegian west coast, across the Atlantic and in the Mediterranean, just like the American cruise lines increasingly brought American tourists to Europe. For example, a leading international cruise line harbour has been developed in Copenhagen.70 Cruise tours re-created some of the glamour that surrounded the Atlantic Ocean liners between the two World Wars. The shipping companies address customers directly through the Internet or via travel agencies that increasingly put cruises on their agenda.
Cruise lines are an American invention, and American tourists and shipping companies have continued to dominate this business into the new millennium. The number of cruise-passengers keeps on growing, having reached 11 million in 2004, of which some 80 percent were Americans.71 Direct revenues of the industry are $20 billion and the deriving economic effects twice as much, corresponding to one percent of total tourism revenues. More than half the American cruise lines leave from Florida. Continued growth is projected for the cruise line industry that might double its revenues within the next decade.72 The popularity of cruise tours may be seen from the fact that every sixth American at one time or another has been on a cruise vacation. Most passengers are middle aged and older.73
Like any other industry, the international expansion of cruise line tours has resulted in a global consolidation process around a few companies. American Carnival Cruise Lines of the Carnival Corporation and the Royal Caribbean are the world’s two largest cruise lines, followed by Star Cruises in Asia Pacific.74 Most independent cruise lines have been swallowed by the global consolidation process of these three leading cruise lines.
Electronic Cards
Around 1960, American Express and Hilton Hotel Corporation launched the world’s first electronic payment cards.75 It took a decade, before the American banks engaged in electronic cards when Visa and Master Card were introduced.76 Even today, Visa, Master Card and American Express are the most widely used electronic payment cards. With payment cards,