Thomas Cook - Where next?

The travel business is an ever changing beast and after hearing about Thomas Cook's financial woes I thought I'd spend some time considering what it all means.  Both for Thomas Cook as well as travellers and tourists (I'm not going to get into a debate on what the difference is, let's just say mostly people see themselves as travellers and other people as tourists).  


Firstly, what is the problem that Thomas Cook has? Simply put Thomas Cook appear to owe 1 billion pounds to the banks and based on their current share price they are only valued at about 100 million pounds.  The company also needs to convince their bankers that the company's management can handle the companies existing problems.  So all in all then, quite far up a creek it might be fair to say.


As pundits and commentators have quite rightly observed the effects of the Arab Spring in Egypt and Tunisia as well as the floods in Thailand, have hit Thomas cook hard as these three countries are key markets for them.  Combined with the world's financial insecurity and the knock on effects of the ongoing "Euro-Zone Crisis" But I think there's more to Thomas Cook's current set of woes.  The business model of Thomas Cook is still based on the founding principles of "packaging".  Creating a "packaged holiday", at a time when we are all becoming aware of how less packaging is best.  Almost everyone in the UK will know the meaning of that term "package holiday" meaning a holiday or vacation, where you buy the travel, the accommodation, insurance etc at one price.  And basically you're whole holiday is sorted out for you, a business model that is starting to look a bit out of date after 170 years.  The peak of package holidays from the UK was the 1960's to the 1980's, people often going abroad for the first time, on affordable holidays to places like Spain, Portugal and Greece.  But now people can go anywhere and moreover the internet means they can do it all themselves and they don't need anyone to hold their hand any more.  Travel Trends point not just to people booking their holidays online, which in someways shouldn't hurt Thomas Cook too much as they have a huge online presence.  But having shops is certainly an outdated concept for most people looking for a holiday, it is also that people are more and more confident about making own their arrangements.  


The shift the world has undergone certainly in the post-industrial information age (thanks for that term sociologists) is people are far more used to travel generally.  When the Thomas Cook, the founding father of the company arranged for a group of temperance (tee-totallers to you and I) to go to a rally in Loughborough in the 19th Century it was all a completely new proposition, a travel "agent" sorting it all out for you.  Subsequently the emphasis was in taking the stress out of travelling, and allowing you to enjoy your time away, without having to think much about arrangements other than making the initial departure point.  So even if the advertising has changed a little and we now see the "done-well couple from next door" namely Harry and Louise Reknapp, who need a break from their busy schedule advertising the Nintendo Wii, and need to look photogenic on a beach in front of a sunset.  We don't see Thomas Cook as reflecting our needs, perhaps for the young family, not for the young couple who are more likely to look to MrandMrsSmith.com.  



Social media sites like TripAdvisor have helped to chip away at Thomas Cook, because people enjoy reading peoples reviews and like to think more closely about where they holiday than they did in the past.  (Leaving aside that some unscrupulous souls seem to be actively holding hoteliers to ransom,even when there have been no problems with their stay as well as some postings are by hotels themselves and a system which is wide open to abuse, which seems to be on the rise, right, enough I'll park this tangent).  

Also the travel market has broken into many different markets and the mass market has become harder to define as well as market to.  People want more, they more for less and they also know far more about what they should expect.  The time of people accepting what they are given and making do is long gone.  


Obviously some people will be looking for a beach, a pool and a hotel with restaurant and bar, a package firm will be perfect for them.  But these days, more and more people want more for their money and that means experiences, in the way people love to cook far more than they did a few years ago.  They are far more willing to be more adventurous with their travel.  In a time when the word "Lifestyle" actually means something to so many people, they see their travel needs as reflecting the image that they have for their own lifestyle.  

Travel Insurance and Scamming Emails from People in Spain

One thought this week and a word of warning about emails....


Right this is perhaps a very obvious posting.  As someone who has travelled around the world at different times, to various different places.  Including 1st, 2nd and 3rd world countries.   Every time I have been away from my home country of the UK I have had travel insurance.  I was effectively indoctrinated into that being the first thing or the second thing after vaccinations that you got straight on to.  On one level to ensure that you have decent insurance which will cover you in the event of the worst situation becoming a reality and also making sure that the insurer would take the appropriate action and make payments to you as fast a possible, rather than being obstructive.  As a result when I have been abroad and things have gone array, I've always had the psychological reserve that I had financial and medical support.  So much so that I have never made a claim on my travel insurance as the amounts have never been enough to really make it worthwhile.  


So fast forward to lunchtime, this Monday and an email from an old friend who said she had made an unplanned trip to Spain.  She had been robbed, lost all her cards, all her cash and her mobile phone, leaving her in Madrid in the desperate situation of having no money and having to beg friends to send her cash via a Western Union money transfer.  On one level obviously I felt incredibly sorry for her.  But I was also really annoyed that she had just assumed that being a European visiting another part of Europe she didn't need travel insurance. 


Then, after I got over my initial irritation at my friends recklessness while travelling abroad, I remembered that this sounded very like a scam I first heard of about a year ago and had disappeared into the abyss that is my grey matter.  But gradually my steam-powered memory started to recall the details of a scam where people are sent an email, which is written from someone who you know is or was planning to be abroad at the time when the email arrives, purporting to have been robbed and in desperate need of cash.  Looking back at the email I noticed errors in spelling, admittedly at times of stress there's more than a slim chance that most of us would be less concerned about that.  But my friend is cracking linguist and even though English is not her mother tongue she is very precise.  When I responded to the email I got no response on Googlechat while I could definitely see that she was online and someone was logged into her account.   

So please beware, unless you've had contact with the person and you're sure they really have been robbed in Spain and have rather poor spelling.  Then don't send any money.