This archive report was first published on 24 September 2019.
Thomas Cook's collapse in 2019 sent shockwaves through the travel industry, leaving many to wonder how a company that had been a household name for over 190 years could fail so spectacularly. According to Rafat Ali, CEO of Skift, a New York-based media company, Thomas Cook's struggles were rooted in its inability to adapt to the digital age.
“They were never very good at digital,” Ali said. “That's fair to say.”
One of the key factors contributing to Thomas Cook's decline was the shift away from package tours. As Tim Davis, managing director of Pace Dimensions, pointed out, consumers now have the ability to pick and choose the elements of their holiday, making it easier for them to find better deals.
“The package holiday market has gotten squeezed because it is so much easier for consumers to pick the elements they want for a holiday, and for them to be able to pick them at a good price,” Davis said.
Thomas Cook's decision to move towards being a tour operator, rather than adapting to the changing market, only exacerbated the problem. As Davis bluntly put it, “It is a market that is going to die, it is just a matter of time.”
Another factor that contributed to Thomas Cook's downfall was its decision to operate its own airline. In the early 2000s, the company began slowly absorbing Condor, a Frankfurt-based airline, and in 2003, it began operating its own airline, Thomas Cook Airlines.
Many experts pointed to this decision as a primary source of its troubles. As Kerby of the Travel Advisors association noted, “It's very hard to operate a travel agency, and it is very hard to operate an airline. And the lessons you learn operating a successful agency do not always transfer to operating an airline. Both are independent, complicated businesses in their own ways.”
