This week Britain and even the rest of the world looked on in surprise as last-ditch rescue attempts by Thomas Cook’s board materialized into nothing and the company went under. By not securing a bailout, thousands of jobs were lost – about 9,000 in total – and an estimated 150,000 British holiday makers were stranded out in their holiday operations.
There were several reasons why Britain’s biggest tour operator failed to turn things around. Financial burdens aside, the other reasons included social, meteorological, Brexit and stiff competition from online travel agents.
Effectively, the long summer holidays made people happy to indulge in a so-called staycation and Brexit created much travel uncertainty and people were reluctant to make long term bookings.
One can definitely not discount the power and rise of online and direct players. When they become a major reason for the demise of a giant it’s probably best to take note and make sure that your business is ready for such competition.
It means having an online presence with a website and social media accounts at the very least. Online booking forms should be simple and quick to use. If you also have capacity to answer your clients using the latest tech (chatbots, etc.) then you have some hope of winning over the younger generation. They are , after all, the ones who are happy to do away with talking with a consultant face-to-face on the high street.
Besides learning business lessons from Thomas Cooks’ demise, we can also share lessons with our customers. The need for travel insurance and informing customers how vital it is to purchase all future travel arrangements by credit card is a must or there’s always a danger that customers will lose money again. And Thomas Cook will surely not be the last major travel operator to face financial ruin.
Offering the right travel insurance product as well as providing the best advice going to be vital in all travel arrangements going forward because as we’ve learned few British travelers see the need to purchase this type of cover.
This is where brokers, insurers and online provider can step in and should (hopefully) make changes to make sure that things are transparent and clear to the customers. There’s much you can do to make the purchase of travel insurance less onerous (particularly online).
With technology on our side, there’s no reason why we can’t make it simple for our clients to make sure that there aren’t any similar losses to the one suffered by Thomas Cook holiday makers who weren’t able to travel.
Travel insurance is already deemed as a complex and grudge purchase. As one CEO of Moneyexpert.com Jason Smith pointed out: “Travel insurance can be confusing if you don’t know what you are looking out for. We know from our own research that under a third of Brits (31%) are not buying travel insurance, with 41% thinking they don’t need it. However, travelling can be costly.”
Thomas Cook is not the only company to see its demise through more nimble, online operators. Airline Monarch airline collapsed in 2017, probably as a result of the very same package holiday, low-cost airlines (Easyjet and Jet 2) that made it difficult for Thomas Cook to remain competitive.
You can’t predict the weather and you can’t predict what will happen after Brexit. But one thing remains clear: that if you don’t cater to customers’ needs online to make bookings when and how they want it then you may not be around for much longer…