Simon Calder: The company remains a robust and going concern
Simon Calder is Travel Editor at Large for The Independent, writing a weekly column, various articles and features as well as filming a weekly video diary. Every Sunday afternoon, Simon presents the UK's only radio travel phone-in programme called The LBC Travel Show with Simon Calder (97.3 FM). He is a regular guest on national TV, often seen on BBC Breakfast, Daybreak, ITV News and Sky News. He is often interviewed on BBC Radio, particularly for BBC Radio 4’s You & Yours programme and BBC Five Live.
Wednesday 23 November 2011
Suppose, at the start of the year, you had 100 shares in Thomas Cook. At £2 each, you could have made enough for a package holiday to the Med. While there are still plenty of £199 deals, selling the shares at yesterday's price would not even buy a one-way ticket on the Gatwick Express.
Thomas Cook is the strongest brand in travel, with a tradition that stretches back 170 years. So how could it go so badly wrong? Partly misfortune, and partly mismanagement.
It is easy for fellow countrymen of Thomas Cook (the person) to imagine that Thomas Cook (the company) is composed only of high-street travel agencies selling mainstream package holidays with flights on Thomas Cook Airlines. In fact, Thomas Cook (the multinational business) is a lot more complicated – which could, ultimately, prove its salvation.
The move into Russia was, as they say, a good idea at the time. But key destinations for Russians are Egypt and Thailand. When the former overheated and the latter overflowed, bookings were hammered. Bad luck, but the one certainty in this industry of human happiness is that things will always go wrong – and holiday firms need deep pockets to respond. Mr Cook's pockets were once happily filled with earnings from the package holiday business.
Unfortunately, the internet bestowed anyone with a broadband connection the ability to assemble flights, hotels and a rental car. The past couple of years, from ash cloud to Arab Spring, have also been particularly cruel to Thomas Cook, but the firm should have moved away from commoditised two-star Mediterranean holidays much earlier.
The management failed to read its own brochure – at least the current Club 18-30 edition. It explains: "We're always changing. That's because you are always changing too. New fashions. New music. New attitudes." Arch-rival Tui realised much earlier that the future lies in differentiation, in specialist adventure and activity holidays, and in combining brand and brute force in the market place to deliver outstanding experiences at competitive prices. The collapse of the share price does not presage the biggest collapse in travel – unless fearful customers shy away from Thomas Cook in the post-Christmas sales surge. I'll be buying, knowing that my money is safe thanks to Atol protection, and confident the holiday will go ahead.
The firm remains a robust organisation and going concern, but five years from now will be a lot leaner and fitter. Which, sadly, means job losses. Thomas Cook's core strength is that it remains a trusted brand, which is just what travellers need when stepping out of the comfort zone.
Diving in at the deep end is no excuse for shirking the style stakes
- 1 Game of Thrones author George RR Martin says 'f*** you' to fans who fear he will die before finishing Westeros saga
- 2 Loom bands: Bids for dress made from colourful rubber pass £170,000 on eBay
- 3 Why I'm on the brink of burning my Israeli passport
- 4 L'Oreal cuts ties with Belgium supporter Axelle Despiegelaere after hunting trip photographs
- 5 The true Gaza back-story that the Israelis aren’t telling this week
Game of Thrones author George RR Martin says 'f*** you' to fans who fear he will die before finishing Westeros saga
Loom bands: Bids for dress made from colourful rubber pass £170,000 on eBay
Supermoon 2014: When and why will the moon look bigger and brighter this summer?
Tommy Ramone dies: Last surviving founder and drummer seminal punk band The Ramones dies aged 62
Gaza-Israel conflict: The terrible price Palestinian children are paying for Israel’s war with Hamas
Sustained immigration has not harmed Britons' employment, say government advisers
War is war: Why I stand with Israel
7/7 memorial defaced on anniversary of 2005 attacks with ‘Blair lied thousands died’ graffiti
Australia facing international condemnation after turning around Sri Lankans at sea
Even when it brutalises one of its own teenage citizens, America is helpless against Israel
Socialist Worker called to apologise over ‘vile’ article saying Eton schoolboy Horatio Chapple's death is ‘reason to save the polar bears’
iJobs Money & Business
£70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...
£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...
£60000 per annum: Harrington Starr: Trade Desk Specialist (FIX, Linux, Windows...
£35000 per annum: Harrington Starr: Service Desk Analyst (Windows, Active Dire...