Thomas Cook’s liquidation in the early hours of this morning is the end for the travel agent that pioneered the package holiday – and in recent years has been challenged to change with its customers as they found more convenient ways of booking their trips online.
In 2018, the travel agent has said, 64% of its holidaymakers bought their holidays online, while ecommerce sales grew by 30% a year. Two in five people leaving the UK on a Thomas Cook holiday used its app to help them manage their holiday and it seems that its customers trusted its digital presence: customer satisfaction, as measured by its net promoter score, rose by five points in 2018.
Other digital innovations over the years have included bringing digital into stores including offering tours of hotel rooms, and holiday excursions through virtual reality headsets. It moved to a OneWeb platform to underpin all of its trading sites around the world.
But as the shift online gathered pace, the company moved to close stores. This March it said it would close 21 and reduce its store estate to 566 in what it said was an “acceleration of its UK efficiency programme.” When it published half-year results in May – which showed the business turned over £3bn but reported a loss of £1.5bn in the six months to March 31 – the company said that Brexit had been a factor in creating an uncertain consumer environment that had led to a slower pace of bookings. "There is now little doubt that the Brexit process has led many UK customers to delay their holiday plans for this summer," said chief executive Peter Fankhauser at the time.
Commenting on today’s news, Stefan Spendrup, VP enterprise mobility, northern and western Europe at business mobility specialist SOTI, said Thomas Cook’s failure was unlikely to be the last in the sector and he called on other travel operators to ensure that they had adapted to the demands of today’s competitive landscape.
“In recent years, innovations such as the Internet of Things (IoT) and Artificial Intelligence (AI) have completely transformed the way brands engage with their customers," said Spendrup. "These new technologies have raised the bar when it comes to the level of customer experience airlines and travel companies are able to provide but, also, the level of experience customers now expect as a result.
“To survive in the highly competitive travel sector, airlines and travel companies need to innovate, harnessing all of the capabilities that technology now provides to enhance the customer journey. They need to be able to provide real-time, data-driven insights to improve their interactions with customers and ensure they remain tuned in to ever-changing consumer demand in a digital transformation age.”
The Thomas Cook Group, whose roots go back to 1841 when businessman Thomas Cook launched a one-day rail excursion from Leicester to Loughborough, is now in compulsory liquidation with all flights and future holidays cancelled. The Civil Aviation Authority has launched what it is describing as the biggest peace-time repatriation scheme for an estimated 150,000 travellers who are currently on holiday with the business.
“We have launched, at very short notice, what is effectively one of the UK’s largest airlines, involving a fleet of aircraft secured from from around the world,” said Richard Moriarty, chief executive of the UK Civil Aviation Authority. “The nature and the scale of the operation means that unfortunately some disruption will be inevitable.”
An estimated 21,000 jobs worldwide will be lost as a result of the move, including 9,000 jobs in the UK.
Fankhauser said today: “Generations of customers entrusted their family holiday to Thomas Cook because our people kept our customers at the heart of the business and maintained our founder’s spirit of innovation.
“This marks a deeply sad day for the company which pioneered package holidays and made travel possible for millions of people around the world.”
Image courtesy of Thomas Cook