This week, Thomas Cook has finally collapsed into liquidation with the loss of thousands of jobs and stranding 150,000 UK travellers abroad. The 178-year-old company is the world’s oldest travel firm, which in its heyday in the mid-1980s rode on a package holiday boom. But since then, it has been slow to adapt to the changing travel landscape as consumers moved away from travel packages and made holiday bookings online.
Its out-of-date business model led to mounting debts of over $2 billion dollars that eventually brought it down. As it should be. In the free market, companies that deliver what the customer wants should prosper. And the corollary is true. Companies that are irrelevant should fail and leave the market.
There has been talk that the Thomas Cook brand, with all its heritage and widespread awareness, could find a buyer and live on. But I would argue that the Thomas Cook brand should not be saved.
Brand not fit for purpose
Kantar’s study showed that Thomas Cook was a well-known brand but lacked distinction in the minds of consumers. Yes, it’s famous advertising slogan “Don’t just book it, Thomas Cook it” represented its proposition of quality, affordability and security. But that provided no real competitive advantage in today’s travel market.
The brand is old and tired, and even if a buyer was to be found – a tremendous amount of additional investment will be needed to refresh the brand to align to some new business model. And what new business model should the brand be aligned to? This is not immediately clear to anyone.
Brand has been irreparably damaged
In the travel market, trust and reputation is everything. Goodwill takes a long time to build (and Thomas Cook has done that well over its illustrious history), but can be lost in an instance.
I fail to see how this brand can possibly be resurrected given the incredible damage to brand equity. Images and stories of 150,000 UK travellers being stranded abroad, jobs being lost overnight, suppliers not being paid, will haunt the brand and any future buyer for years to come.
Any potential buyer would surely have to ask themselves if all this baggage is worth it. And I doubt it is.