Arguably the most iconic of travel brands, Thomas Cook, has collapsed after 178 years of business, leaving a train of debris and much recrimination behind it.
The end came on September 22 when the tour operator failed to come up with an additional 250 million euro of investment to satisfy the banks after already coming up with 900 million from its existing investors in a bid to stay solvent.
As the dust still settles, some 22 000 people worldwide are set to lose their jobs with up to 450 000 holidaymakers across the globe who are already on holiday set to be impacted. Hundreds of thousands more with holidays booked for the future will also face the same scenario.
For many, including Thomas Cook clients from its home market of the UK, the fact that it is standard practice for tour operators to offer protection for such a situation means that at least the vast majority won’t be financially impacted too severely but most will be inconvenienced in some way or other.
Replacement aircraft and crews will operate the flights Thomas Cook’s own aircraft were due to fly and passengers will return back to their home countries as close to their scheduled time as is possible.
The tour operator announced a massive 1.6 billion pounds loss this past winter and from that moment on, the writing was on the wall. Just why a firm with 178 years’ experience in travel should meet such a sad end is an altogether different question with no single answer, but plenty of warning lights appeared over the years that were not properly addressed.
One travel expert said that Thomas Cook was “not equipped for the 21stcentury”. A brash statement but not one without substance. Much of the company expense was in the High Street in bricks, mortar and retail staff while the rest of the competition was going ‘online’.
While it is still true that the package holiday has a significant following in numerous markets, including the UK, the way people research their travel and then book it is something that Thomas Cook could not find a happy balance with.
Additionally, the last few years has seen the company impacted by the “withdrawal” of capacity due to terrorist threats in Turkey and North Africa, both regions Thomas Cook had invested heavily in with its products.
Indeed, the Bulgarian Black Sea was also an area of focus for the company in the Short Haul European Market and no doubt many hotels in the country will face a challenge to grab contracts for summer 2020 with other operators, the majority of which will already have been signed by their rivals.
Talk also abounds of excessive directors’ salaries and bonuses, rank bad business decisions and a coup d’état in 2014 when the then CEO, Harriet Green, a travel business outsider, was ousted.
She had begun to successfully turn around the ailing business during her two years in situ, taking it from a worth of 148 million pounds to two billion pounds. She had though upset someone as apparently an all-male management board met in secret and ousted her! It was downhill at breakneck speed from that moment on. This particular story is set to gain more media coverage as the failure unfolds and the finger of blame starts to be pointed.
So the morale of the story once again is you are never too big or too historic to fail. Thomas Cook, founded in 1841 and an icon in the world of travel joins Hogg Robinson, founded in 1845 as victims of the modern world, where bad decisions and personal interest consign them to the graveyard of travel.
(Photo: Rob Hodgkins)