Why Thomas Cook collapsed: Historic firm hit by perfect storm of travel turbulence – Nigel Thompson

Icebergs in the form of the digital age were dead ahead. Up on the Thomas Cook bridge the inept captains ploughed on obliviously, like a travel industry Titanic.

Now Thomas Cook has sunk. Just think about it – the world’s oldest holiday firm and a venerable British institution is no more. Monarch’s collapse two years ago was one thing, this is something else. Quite extraordinary.

You can bet there will be some very interesting discussions in the boardrooms of the likes of TUI, Jet2 and easyJet Holidays over the next weeks and months about the lessons learned from Thomas Cook’s desperately sad downfall.

Somewhat ironically in the age of all-inclusive drinks getaways, Thomas Cook was founded by the eponymous cabinet maker and former Baptist preacher in Leicestershire 178 years ago, initially taking a few dozen people on temperance movement rail trips.

It went on, via various incarnations, Cook family owners and at one point even nationalisation, to taking millions of us on annual breaks and was something of a national treasure – just like good old Woolworths which collapsed in the banking crisis of 2008/9.



Thomas Cook founded the company which began by offering teetotal day trips by train

So what went wrong with Thomas Cook? Well, how long have you got? The answer is: just about everything.

Thomas Cook has had a vexed, turbulent existence for some years, lurching from crisis to crisis amid profit warnings and share slumps, but clinging on for dear life and still having a loyal customer base, a lasting reputation and a name other brands would kill for. It’s Thomas Cook, for goodness’ sake. It’s the name in travel.

But now it’s finally run out of luck, hit by a perfect storm of travel turbulence:

* Three years of Brexit uncertainty has affected the stability of the package holiday market, and Thomas Cook certainly had its fair share of that pain as the Government and Parliament seem to be lurching towards leaving the EU without that crucial deal in place, leaving holidaymakers unsure what lies ahead.

* Times have of course changed and the feeling I detected inside the travel industry was the firm was an analogue business in a digital age, selling late 20th century-style package holidays in the early 21st century.



An empty Thomas Cook shop in Liverpool

By that, I mean we are in an era where more and more people are effectively becoming their own travel agent as they book their holidays by going online to build DIY trips with separate flights and hotels.

It’s not the 1960s, 70s and 80s any more, where Brits in their millions went to a Thomas Cook high street store, thumbed the glossy brochures and paid their deposit on that hard-earned fortnight-long escape to the Costas.

The traditional Thomas Cook store or website (which in truth was not the best out there anyway) was not necessarily the first port of call.

* Factor in also the rise of the many (and some very good) online travel agencies. If you’d Googled a holiday recently I’d bet Thomas Cook wasn’t anywhere near the top.

* The traditional annual two week summer getaway is on the wane. Today we’ve seen the emergence of multi-breaks throughout the year with people choosing perhaps a sunshine week abroad, then a short haul city break and a staycation.

* It goes on – besides Brexit woes we’ve had some idyllic British summers in recent years, making staycations ever more popular.

* Low-cost airlines have hugely shifted the dynamic of overseas holidays and were yet another nail in the Thomas Cook coffin, luring away passengers with irresistible pile ’em high and sell ’em cheap no-frills cabin baggage only fares. I certainly don’t blame the paying public who simply voted with their wallets – fair enough.

* Then there’s the hugely significant loss of its substantial business to Sharm el Sheikh in the Egyptian Sinai peninsula, which is still off limits to British airlines since the terrorist bombing of a Russian holiday charter jet in 2015. That was a grievous blow to the company.



British tourists in Turkey’s Mugla board a plane at Dalaman Airport in Mugla, Turke

Yes, Thomas Cook had enjoyed some success in Turkey and had done well in building some trade to Egypt’s mainland Red Sea resorts around Hurghada and also in Tunisia, where it was first to return last year when the country went back on the British market after the Sousse terror atrocity in 2015.

Plus it had created some interesting new concepts such as the contemporary Casa Cook hotels, aimed at the younger market.

Also, the sports breaks performed well; I went on a Monaco Grand Prix weekend with them last year and was highly impressed by the product.

However, it’s always all about the bottom line in business and the merger with MyTravel in 2007, and all manner of subsequent ill-judged and costly acquisitions meant Thomas Cook was essentially existing solely to sell millions of holidays to service the colossal debt it was saddled with from that wretchedly overambitious era.

Bosses came and went and tried to steady the ship with cost-cutting, share shuffles and sell-offs, but unfortunately they were only ever rearranging the deckchairs on that travel Titanic.

Now thousands of hard working staff around the country face redundancy, hundreds of struggling UK high streets stand to lose a familiar face with the doors closed at 550-plus agency stores and, of course, the holiday plans of hundreds of thousands of Brits are in disarray.

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Thomas Cook goes bust

On a personal level I knew the Thomas Cook press office staff in Peterborough and Manchester well and we had an amicable working relationship.

They were a decent bunch and did a good job in often difficult circumstances, hamstrung by their awful management. I also knew the friendly staff at my local high street travel agency and, like the press team, best of luck to them in the future.

Once we had the brilliantly simple advertising slogan, ‘Don’t just book it, Thomas Cook it.’

But thanks to a woefully abysmal performance from the firm’s management over many years – and admittedly some bad luck – it feels like we’ve just lost a dear old friend.

The buck stops with the bungling boardroom who were not listening when the lookouts shouted ‘iceberg, dead ahead’. A good name ruined; a complete Thomas Cock up.

source.