Last Monday, the British travel group Thomas Cook collapsed in spectacular fashion, leaving a trail of disaster in its wake. More than 600,000 holidaymakers stranded worldwide, debt to the tune of almost $2 billion (Dh7.34 billion), 21,000 jobs on the line in 16 countries, and gaping holes in national tourism industries across Europe, Asia and Mena region.
As we speak, typically laid-back vacation spots now offer scenes of chaos: hotel guests held hostage until they cough up the money owed by their now-bankrupt tour operator, up to 3,150 partner hotels going out-of-pocket, small businesses facing uncertain futures, hospitality workers forced to take impromptu vacations — some indefinite in the length.
Failing to catch up digitally
The demise of a 178-year-old company which had 22 million customers a year and annual sales of more than $11 billion is as ironic as it is grave. Thomas Cook’s eponymous founder was an industry pioneer; he pretty much invented group excursion and, in doing so, made travel a possibility for the average person through affordable trips by road, rail and sea.
Yet, almost 18 decades on, the collapse of the travel group boils down to a failure to keep up with the times. As one former managing director of Monarch Airlines recently told a BBC radio show, Thomas Cook had “an analogue business model in a digital world”. The MD — who I should point out, left the airline long before it too went into administration in 2017 — couldn’t be more right.
Freak heatwaves, political unrest and a fall in the British pound due to Brexit uncertainty are cited among the final straws that broke the back of the Thomas Cook camel — but the pile has been mounting for years. Why? Because while much of the travel industry was busy migrating online and holidaymakers were increasingly taking a DIY approach to booking their trips, the holiday group was busy clinging on to a traditional business model and a lead weight of tangible assets that, until last week, included 550 brick-and-mortar agency shops, 105 aircraft and 200 hotels with a grand total of 40,000 rooms.
No compelling reason
In many ways, the logic behind the decision to stick to a declining tradition is hard to fathom. After all, in an increasingly do-it-yourself environment, why would a customer opt for a Thomas Cook charter over a low-cost carrier? Or a Thomas Cook hotel over one of the millions of accommodation options now available via the likes of Expedia, booking.com or Airbnb?
For years, the group’s TV advertising campaigns in the UK used the slogan “Don’t Just Book It, Thomas Cook It”. That once-clever soundbyte is now a source of embarrassment likely to tarnish the company’s legacy and haunt its misguided decision-makers for some time to come.
In fact, the lesson for businesses today is the abject opposite: ‘Whatever you do, do not Thomas Cook it’.
A science to staying on
No matter how big your revenues, how strong your brand loyalty, or how long your legacy, you have to continue innovating and adding value to stay relevant and, ultimately, to stay in the game. And it’s not just businesses operating in the travel and tourism space that should sit up and take note.
The same lethal combination of the internet and sharing economy that sealed the fate of Thomas Cook could just as easily spell the end for companies in other industries too. Digital technologies are filtering down into almost every industry and sector on earth today, and where there is technology, there is change.
It means company strategies and financial budgets must be reviewed and updated on a continual basis. Of course, decision-makers need to look to the future, but don’t lose sight by searching beyond a movable horizon.
Foresight is essential when it comes to predicting or understanding the direction in which your industry is heading. But in times of constant change, it pays to think, plan and invest short-term, just as it pays to keep your organisation light and nimble. Put another way, why buy a plane when you can simply help travellers buy the ticket instead?
Tommy Weir is CEO of enaible: AI-powered Leadership and author of “Leadership Dubai Style”. Contact him at email@example.com.