Thomas Cook. A recipe for disaster?



On Monday 23rd September, the Thomas Cook Group went into administration. Incredible news.


Whilst, 99% of the industry was all too aware of the problems at the world's oldest travel company, seeing them tottering on the verge of collapse, many of us believed they'd find a white knight to pull them back from the brink, even at the eleventh hour.


We're hearing that 150,000 UK travellers will be repatriated from across the world over the coming month or so. Something we haven't done since Dunkirk. At least travellers will have had their holiday (albeit hampered). Globally, there are 22,000 Thomas Cook jobs at risk with 9,000 of those in the UK.


Destinations are also understandably going into panic mode, too. One key tourist board figure contacted me to express his major concern over trying to replace the 50,000+ visitors that normally arrive on Thomas Cook planes into his destination each year.


So whilst this subject has finally knocked Brexit off the No#1 spot for things we're talking about (at least temporarily), what does the future hold for the Thomas Cook Group?


1 - The Airline.

There has been a rich-vein of rumours about would-be suitors for the airline for months now. But no fly-away offers were forthcoming for the ailing outfit. But then take a look at the market. Competitors - especially those involved with long(er) haul - have been challenged by the Boeing 737 Max saga, leaving some short of useable aircraft as parts of their existing fleet are grounded.


Surely with a good % of those 150,000 travellers having flown with TCA, someone wanted to capitalise on all those seat sales. What's likely to have happened is that one of those potential buyers heard TCA's death knell tolling in the distance and rather than pay a high price, they've waited for the inevitable collapse to snap it up from the bargain basement.


I predict within 3 months, that vast majority of the TCA fleet will again take to the skies, sporting a new livery under new ownership.

2 - The Routes

The likes of Ryanair and EasyJet are surely going to reduce their UK-EU flights post-Brexit, with a likely reduction in Eastern Europeans 'commuting' to work. Won't they be looking at new destinations within the flying range of their fleets, that are suddenly left without airlift?


I predict within weeks, either EasyJet, Ryanair or both will be announcing new or increased routes to current TCA destinations.


3 - The Tour Operation

Surely a competitor or venture capitalist will snap up the decades worth of know-how available from TCG? No longer virtually integrated (remember when that was such a buzzword expression in the industry?) but still providing an impressive tourism infrastructure, I don't expect this expertise and experience to go to waste. But will the brand have been damaged? Whilst the 'evil internet' and Brexit uncertainty will no doubt be used to cushion the blow, if mis-management or FatCat allegations are splashed across newspaper headlines in the coming days, the brand name may be tarnished forever. Remember H.Samuel? You don't? Exactly.


I predict that within 3 months (in time for the key buying season), there will be a major new player in the market : either a stand-alone re-invented Thomas Cook Tours or a new arm of another existing tour operator, using the TC brand name.


4. - Thomas Cook properties overseas

Again, I'd imagine these will not be on the market for long, but I don't see one major player buying them all. More likely, the estate will be broken up, with the private sector in each destination potentially looking to capitalise by taking on proven or potentially profitable properties.


I predict within 6 months, 75% of all existing properties will be sold. Properties that are part-build or on the (approved) drawing board might well attract the interest of a white knight.


5. Thomas Cook on the High Street

I don't see a bright future here at all, sadly. Their current retail look is horrendous. Sterile exteriors with dull graphics (offering no aspiration or inspiration) make their stores look like pharmacies not gateways to escape, adventure, happiness, excitement and romance. Seriously, imagine you didn't know what Thomas Cook was, what would you think they sold? Fire extinguishers?


Until retailers stop selling exactly the same product/service as the public can buy via the web, they will continue to see a major decline in business. They need to offer an appealing 'experience' that cannot exist online. Between bricks and clicks, there is the perception that the latter permits 'late night browsing without pressure' and also offers lower prices. Tour operator brands like Kuoni, Travelbag and Trailfinders add new layers and dimensions to their bricks proposition, but I can't see them buying up many regional braches that rely so heavily on fly-and-flop business, which may have been lost to the internet forever.


Sadly, I can see more Oxfam charity shops and Costa Coffee branches coming to a High Street near you soon.


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So whilst we still blink in disbelief at the notifications flashing up on our smartphones, our hearts go out to those whose holiday dreams have been ruined and even more so to those whose jobs are lost. We do predict a somewhat brighter reality than the bleak outlook that exists right now, but we do have to accept that the travel industry landscape has dramatically changed and will never be the same again. At Kamageo HQ, we're only 20 minutes drive from both Leicester and Loughborough...but our journey continues. We hope the Thomas Cook brand can get back on the rails soon, too.


Tim Henshall

Chief Executive, Kamageo