As the oldest tour operator in the world and Britain’s largest travel company, Thomas Cook has been taking people on package holidays around the world since 1855. And it’s collapse earlier this week has caused some pretty big ripples throughout the tourism industry around the globe.
The impact is likely to be felt heavily in countries such as Spain, Turkey and Greece who were amongst the company’s main destinations with many hotels and small businesses reliant on the British tourists who travelled there with Thomas Cook.
In the UK, once all 150,000 stranded holidaymakers have been repatriated, the biggest impact will be the loss of up to 9,000 jobs within the industry. Rival companies and members of the public have been offering their help to the staff who have lost their roles.
But many businesses who are part of the UK’s tourism industry may be concerned about what impact it may have on them and the future of the industry as a whole.
We take look at what went wrong at Thomas Cook and the implications for other businesses who may be concerned about the future.
So why did Thomas Cook fold after 178 years in business? As is so often the case, there isn’t just one cause but a number of factors that ultimately combined to make the business unsustainable. The key factors are outlined below:
Changes in consumer holiday habits
The popularity of a two-week beach holiday has been in decline in the UK since the 1990s with shorter city breaks becoming much more popular. This change has been in part due to the rise in budget air travel making more destinations accessible to the masses as well as a shift to a preference for more experience-driven holidays. The problem for Thomas Cook was that these type of holidays are much more difficult for travel agencies to capitalize on.
Changes in how consumers book holidays
Companies like Thomas Cook have struggled since the rise of the internet – consumers no longer need their high street stores as they can reach the holiday service providers online either directly or through the vast array of booking websites available. In fact, in 2018 81% of Britons booked their holiday online with only 15% booking over the phone or in a store. And, in 2018 the majority of people who did book online didn’t use travel agents – they either booked directly with the service provider or via a booking website.
Brexit, Competition and Potential Mis-Management
These changes in consumer habits along with the uncertainty over Brexit leading to a weaker pound, the fierce competition and narrow profit margins within the industry plus potential errors made by the company’s directors meant that Thomas Cook struggled to adapt and ultimately collapsed.
Although it is a great shame that a national treasure like Thomas Cook has ceased trading it is not necessarily all doom and gloom for the rest of the UK’s tourism industry. Thomas Cook may be gone but their customers, hundreds of thousands of them, are still there and will be looking to travel in the future.
There are, however, lessons that can be learned. The main point to take away is that the key to success in the modern world is the ability to adapt. This means being able to change with the times both in terms of how consumers can find your business and book with you as well as the actual products you are offering them.
As more and more people turn to the internet and mobile devices for researching and booking their travel, keeping up to date with the latest technological advances and consumer trends is paramount.
Whether it’s ensuring your website is mobile friendly or even producing a mobile app and instant ticket downloads, or just making sure Google can find your website and that your products are available across as many booking platforms as possible it really can have a huge impact on your business and its success.
And as things change you need to be ready to change too.
Diversifying your business can help you to appeal to a wider audience and enables you to add value to your customer’s time with you.
Whether its offering a wider range of events or being able to provide a choice of local days out and flexible itineraries, there are lots of opportunities to diversify that can not only provide an extra income stream but will also help you to adapt as the demands to the consumer change.
At Open Pass we strive to provide opportunities within the tourism industry that connect businesses with each other and the consumer.
Talk to us today about how we can help you and find out about joining our global marketplace.