Thomas Cook’s Return & The Power of Brands
Since the beginning of the COVID 19 pandemic, the travel industry has faced immense challenges. Though 2019 saw a record number of international tourist arrivals, the following year saw that number fall to its lowest level since 1988 — as hotels and tourist attractions were forced to close their doors. Flights, holidays, and cruises were all canceled, which affected millions of consumers.
But during this tumultuous period, Thomas Cook was going through an altogether different type of struggle. The previous September, it had completely collapsed — unable to finance its massive debts after years of floundering in an industry going through sweeping changes.
Throughout 2020, rather than weathering the pandemic, the various assets that comprised the company, from its fleet of planes to its various subsidiaries across the globe, were picked apart and sold off.
But roughly a year since it went into administration, the brand came back from the dead (with the pandemic still raging) — returning to the fray as an online-only travel company. Now owned by Fosun International, who bought the “Thomas Cook name, related operations… and other intellectual property such as domain names, apps, social media, and IP addresses” for £11 million, the brand was in for a major overhaul.
The story of Thomas Cook’s brand is an important one — inextricably entwined with the evolution of the travel industry. Over its 181 year history, it has faced many challenges and there’s a certain irony that it was toppled not by the pandemic — which struck 5 months after its collapse — but by its inability to stay competitive in a changing marketplace.
There are also vital insights into the power of brand here, demonstrated by its resurrection and the price tag attached just to its recognizable name. So without further ado, let’s take a deep dive into the story of Thomas Cook.
The Invention of Modern Tourism
Born in 1808, the eponymous Thomas Cook was a cabinet maker from Derbyshire in Great Britain. A member of the temperance movement, he believed that alcohol was the source of society’s ills, and in 1841, he organized a 12 mile trip by train from Leicester to Loughborough for 570 like-minded individuals to attend a temperance meeting there.
This set him on the path to organizing tours professionally and, by expanding his enterprise with more rail journeys, he unwittingly became the father of modern tourism.
The tours on offer steadily became more ambitious, as rail networks spread out and connected more destinations. By the mid-1850s, Thomas Cook was organizing tours as far as Calais, for those wanting to attend the Paris Exhibition. The following year, he pushed even further, advertising a grand circular tour of the continent — covering “Antwerp, Brussels, Cologne, Frankfurt, Heidelberg, Baden-Baden, Strasbourg, and Paris”.
After this came tours to Switzerland and Italy, then to America, and around the round world trips by 1873. When the first modern Olympic games were held in Athens in 1896, Thomas Cook was appointed the official travel agent.
From here on, Thomas Cook grew to become the world’s largest travel agency, and by 1984 when the brand’s famous slogan — “Don’t just book it… Thomas Cook it” — came into use, it was something of an institution. In 1997, the company launched Thomas Cook On-Line, the first UK retail travel agency to embrace the internet as a means for customers to book their holidays.
But after more than a hundred years of success, the arrival of the internet was set to fundamentally change the travel industry and it would take more than a website to overcome these challenges.
Don’t Thomas Cook It… Just Book It.
Around the start of the new millennium, changing consumer attitudes to travel began to alter the industry, spurred by new ways of planning and booking holidays that the internet now made possible.
This, coupled with deregulation of the air industry, allowed budget airlines like Jet2, Ryanair, and Easyjet to shoulder their way into the market, offering a build-it-yourself alternative to package holidays.
Indeed, when Ryanair launched its website in 2000, most bookings were still made through travel agents — but within a single year, three-quarters of the airline’s bookings were now made online, and travel agents were increasingly cut from the equation altogether.
As well as competing with budget airlines, the 2000s saw new online-only players enter the market, providing consumers with the tools to search through thousands of options, and find flights, hotels, or tour packages themselves.
These travel-fare aggregator sites such as Expedia, Skyscanner, and Kayak made booking a holiday without a travel agent easier than ever. With the arrival of Airbnb in 2008, the travel industry was set to only keep on evolving along this path and, with Thomas Cook facing competition from so many angles, the future looked uncertain.
With all this choice, consumers began to move away from package holidays and became “accustomed to devising their own holidays rather than using travel agents.” This was especially true for younger generations. By 2019, just one in seven people booked via a travel agent, and those who did tended to be “over 65, and in lower socio-economic groups, with less money to spend.”
A 2016 survey revealed that “Millennials would rather take more short trips — at least seven — throughout the year rather than one vacation package”. Alongside this, the growth of social media led to consumers priotizing new factors when booking their holidays, with destinations that offered unique “ experiences and culture “ coming out on top.
While sun-seekers certainly hadn’t disappeared completely, their budget was now split across several trips including city breaks, leaving less for the traditional 2-week beach holidays that Thomas Cook was famous for.
The Fall and Resurrection of Thomas Cook
The travel giant’s first brush with the threat of collapse came in 2011. With debts piling up to a whopping £1.1 billion, the company just managed to secure funds that would allow it to continue trading.
But paying the interest on these debts became an unsustainable burden. From 2011 until its collapse, the company paid £1.2 billion in interest — meaning “that more than a quarter of the money it charged for the 11 million holidays it sold every year went into the pockets of lenders.”
In 2019, the specter of debt reared its head again. This time, the struggling company’s plight had been compounded by Brexit, which had complicated travel regulations and made consumers more cautious about making bookings.
Though the company was close to securing a rescue deal, the negotiations ultimately failed when the company’s banks demanded a further $250 million. On September 23, 2019, Thomas Cook collapsed.
The company’s demise had immediate knock-on effects, with over 150,000 passengers stranded abroad, forcing the UK Civil Aviation Authority to organize 700 flights as part of “Operation Matterhorn” — the largest peacetime repatriation ever undertaken. As well as stranded passengers, there was an estimated 1 million customers who found their “bookings for upcoming holidays canceled”.
But despite all of this, Thomas Cook was not done yet. Two months later, Fosun Tourism Group “bought the Thomas Cook brand along with the inimitable Sunny Heart logo” and revived it as an online-only travel agency.
Central to Thomas Cook’s refreshed identity is a new app and a focus on younger audiences. Purposefully adopting a start-up mentality, the brand’s chief digital and marketing officer Jo Migom explained that:
“we consider Thomas Cook to now be a startup and we want to operate with those principles. I think customer-centricity is a core difference between big corporates and startups.”
The Thomas Cook app, therefore, is built with customer-centricity at its heart, integrating inspirational travel content with the capability to book a holiday in one-click, in order to appeal to younger audiences more accustomed to buying online.
The brand’s iconic slogan also survived the collapse of 2019, but like everything else has been given a slight twist to reflect the new approach the company is taking to the travel industry.
“Love it, Book it, Thomas Cook it”
While still summoning fond memories from a bygone era of travel and referencing the heritage of the brand, the new focus on simplicity and bookability is clear to see.
Though the future of the travel industry is uncertain, the Thomas Cook brand seems to have finally shed much of the baggage it had accumulated over its 181 year history and, with a leaner business model and a new proposition, could be set to bring package holidays into a brand new era. Only time will tell.
What Can You Learn From Thomas Cook’s Rise, Fall and Resurrection?
There’s a lot to unpack here — 181 years of trials and tribulations, in fact.
But the biggest lessons concerning brand come from the last decade, as Thomas Cook struggled to stay relevant in a changing market and find its audience. There’s also a useful takeaway from the brand’s improbable return that defines just how important brands are to modern consumers.
1. If You Don’t Evolve, You’ll Get Left Behind.
The most pressing lesson from the story of Thomas Cook is that your past successes don’t guarantee your future survival — almost all industries are constantly changing as new technologies or consumer demands arise and if you don’t evolve alongside it, you’ll get left behind.
Thomas Cook’s gravest mistake was to allow its brand to stagnate and its offering to stall as consumers developed preferences for alternative options.
The industry had moved to a position where consumers had more choice, more control over their final vacation, and more power to voice their complaints — with services like TripAdvisor, if the product didn’t meet their standards. As technology evolved, many travel brands moved to offer greater levels of customer centricity but, here, Thomas Cook struggled and was rated one of the worse package holiday brands in 2019.
The Takeaway: To combat this, brands need to examine both the competition and the priorities of their target audiences to build a deep understanding of how the marketplace is evolving and build a customer-centric approach that meets the needs of consumers.
2. Your brand should shape perceptions of your product, not the other way around.
Commentators have been declaring the death of the package holiday for years now. Though there will probably always be an audience that wants all-inclusive hotels and flights bundled together and arranged for them by a travel agent, negative associations — particularly in the UK — have pushed consumers to try alternative options.
Thomas Cook was synonymous with the ideal of the package holiday, so it’s hardly surprising that their downfalls came at the same time.
But a strong brand should have the power to shape consumers’ perceptions, regardless of the product on offer. It was completely in Thomas Cook’s power to refashion and redefine what a package holiday could be — shaping it to fit the aspirational tastes of modern consumers.
In order to make sure your brand is successful, it’s vital that you listen to your customers and understand how they perceive your brand, and what associations your offering has — if these are negative, you need to work to change their minds.
In fact, before Thomas Cook’s collapse, it was actually beginning to lead the way in redefining how the sector sells itself and bookings were back on the rise. In 2016, 55% of 18–24-year-olds booked a package holiday, as brands branched out to include “boutique package, with well-design hotels, healthy food, and interesting excursions”.
The Takeaway: The internet has given numerous niche companies a way of finding their audience, meaning that the mass-market appeal of the package holiday may never return.
However, if Thomas Cook had not been saddled with so much debt, perhaps it may have been able to transform perceptions of its core product and ride the wave of a rebounding market. Keep this mistake in mind when growing your own products and services and remember that consumer needs always take priority.
3. Your brand is an invaluable asset
Despite everything that has happened to it, the Thomas Cook brand lives on. It does so because Fosun International paid £11 million to continue using it.
An important step in convincing the Chinese conglomerate to invest in Thomas Cook was showcasing how the brand “still had salience with British public and had the potential to return to what it was.” Even after everything that it had been through, consumer feedback still held that Thomas cook “was a household brand” with “empathy for its situation.”
The Takeaway: This demonstrates that investment in your brand is essential. By building a recognizable identity, you can foster an emotional connection with your customers, which can pay dividends in the future.
As the fate of Thomas Cook demonstrates, a strong brand identity won’t save you from poor business decisions and mounting debt, but it might just give you a second chance and buy you more time while you adapt to changes in the marketplace.
Thomas Cook has been on quite a journey and, while it is now a much smaller company than it was before the collapse of 2019, it lives on to fight another day.
Had the brand utilized consumer insights earlier on, it may have been able to reinvent the package holiday sector, influencing new perceptions of its product to fit the tastes of modern consumers.
This is the most important lesson to take away from the story of Thomas Cook — and to avoid the same mistakes, brands should invest in tools that allow them to understand what consumers want and whether their current marketing strategy aligns with these demands.
Looking forward into the future, if Thomas Cook can finally succeed in redefining the sector or pivot into a new niche, then maybe, just maybe, it could live to see another 181 years.
Originally published at https://latana.com.