It was a sad day on Monday (23rd September) when longstanding travel company Thomas Cook entered administration with the loss of 22,000 jobs globally and leaving thousands of customers’ holiday plans in tatters.
In the immediate hours after the collapse blame was placed in a number of corners, from the government for not stepping in to save the 178 year old company, to the Thomas Cook executives who continued to pay themselves huge bonuses whilst the company spiralled into debt, but arguably a lack of business direction and inability to adapt to the changing holiday market over the past few years had a large part to play in the collapse.
With the headlines about the lack of certainty due to the B word and a recession apparently looming, some have assumed that people in the UK simply aren’t travelling and have put holidays on hold, however according to a recent ABTA report (the travel agent body) 60% of UK adults travelled abroad in 2018. The real kicker for companies like Thomas Cook is that fewer than 15% of these trips were booked through a package operator.
The same report shows that 81% of people booked their holiday online with just 14% saying they went into a travel agent to buy a holiday (and those that do go into a store tended to be over 65 and in lower socio-economic groups, with less money to spend), however Thomas Cook clung to its 560 high street stores and the high rents that came with them.
This trend in holidays being booked online has not happened over night, and online bookings have been increasing for several years. The rise of Airbnb, countless booking sites and no-frills airlines (which only take bookings online) changed the travel booking landscape, so this should have been addressed in the Thomas Cook marketing strategy.
It’s marketing 101 that a company which adopts a marketing oriented approach, i.e. one which focuses on the customer and developing products and communications which create customer satisfaction, is likely to be far more successful than a company which adopts a production orientation and instead of focusing on the needs of the end customer, concentrates on the internal business needs, the products/ services they produce and how to sell these to the end customer.
As marketeers we need to be aware of the changing landscape that we operate in and, most importantly, what affect this is having on our end customer and their behaviour. A company which clings to its heritage, fails to adapt and loses focus of the customer is setting itself up for a tough ride.
Thomas Cook’s collapse should act as a wake-up call to businesses of all sizes – it doesn’t matter how big you are, or how long you’ve been in business, if you lose focus of what’s important to your customers and their behaviours it’s a slippery slope.
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