The world’s oldest travel firm, Thomas Cook, went under last week.
After starting as a small business in Leicestershire, opened by Mr Thomas Cook himself in 1841, the company grew over a 175 year history to become one of the biggest travel agents in the world.
However, it was announced that over winter 2018 the company had lost a massive £1.5 billion.
What went wrong for Thomas Cook? How did all of this come about?
What can we learn as business owners from these mistakes? We’re going to explore in our blog below.
Mr Thomas Cook: A Frontrunner And An Entrepreneur
Mr Thomas Cook was without doubt a frontrunner in tourism systems. He was an entrepreneur to say the least.
Mass tourism in Italy came about due to his business ideas of circular train tickets and hotel coupons.
Travel became more frequent and easier for many of the middle class, and his company were well established for the big holiday boom that would begin some years later.
These package holidays were popular with customers, with many paying for the full catering, flights and accommodation experience to ensure that the whole booking was taken care of.
Bookings were taken through high street branches and large magazines filled with holiday packages for many destinations.
The company confidently filled up the calendar with bookings for the year ahead! A great position to be in!
What Went Wrong?
However, the forward thinking business began to fall victim to the digital age and wasn’t prepared to keep up.
With customers moving away from high streets, and onto their computers, laptops and phones, Thomas Cook kept many of their branches open.
With commercial space prices increasing, and less people walking through the doors to make their big one off booking of the year, Thomas Cook failed to transfer their well established brand into the digital world.
The internet allowed customers to research their own holidays, book their own flights through cheaper airlines, and find their own hotels.
Young people in particular began using websites like AirBnB to rent entire accommodations, rather than resorts, for a fraction of the price.
All of this meant that Thomas Cook put the business up for sale in 2019, and entered into talks with banks and shareholders in order to plug a £200million gap.
It proved to be unsuccessful, and they couldn’t find the funds within the 48 hour timeframe. This meant that 180,000 holiday-makers were left stranded across the world.
What Can We Learn?
Thomas Cook have given business owners a stark reminder that it’s impossible to rest on your laurels of success.
Despite the company’s impressive history and its revolutionary way of thinking in the past, Thomas Cook fell… A huge reminder that businesses are always at the mercy of its consumers.
If we are oblivious to how customers are consuming, we will no longer be able to feed them something they enjoy, and they will stop coming to our table.
As business owners it’s important for us to listen to our own customers: What draws them in? What causes them to leave?
These answers are vital.
If we cannot keep up with customer trends, we will be left behind… It’s a sobering thought, but one that should push us all to keep making our businesses better.
Speak to your customers, speak to your friends, and discover what trends are prevalent in society today.
How can you as a business owner provide a service that is embedded in our cultures wants and desires?
If you can answer that question, and implement your findings, you’ll see your business live a long and healthy life.
Just don’t forget to keep asking it… even if that’s 175 years later!
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