Thomas Cook restructure aims to turn around ailing travel firm

The world's oldest travel firm is scaling back on the high street and focusing online, writes Kim Benjamin.

Emergency loans, travel-agency closures, job cuts and profit warnings - struggling tour operator Thomas Cook, the world's oldest travel firm, has frequently been in the headlines in the past two years.

The brand, which is seeking to turn around a £485.3m pre-tax loss in the previous financial year, is now under scrutiny again after announcing 2500 job losses in the UK - equating to one in six staff in Britain, including cuts to the marketing department.

Its high-street agencies are expected to be major casualties of the restructure - 1600 retail positions are on the line, with Thomas Cook proposing to close 195 of its 1069 UK shops.

Group chief executive Harriet Green, who was appointed last July to revamp the brand's fortunes, last week unveiled a strategy that includes a greater online focus in an effort to close the gap on rivals that have been quicker to invest in digital. Analysts have also suggested that several smaller brands owned by Thomas Cook, including luxury travel agency Elegant Resorts and long-haul specialist Gold Medal, could also be put up for sale in the future.

Travel firms and airlines in Europe have reported a decline in bookings in the past year, but Thomas Cook has also been hit by tough trading conditions in the UK, its main market.

Will its current proposals secure its future? We asked Garry Lace, brand and marketing director at English National Opera and co-founder of Campbell Lace Beta, which handled Thomas Cook's advertising between 2009 and 2011, and Sam Turnbull, marketing director at the Association of Chartered Certified Accountants (ACCA) and former marketing director at First Choice Holidays.

THOMAS COOK STATS

23m people use Thomas Cook for European holidays annually

£485m - Thomas Cook's pre-tax loss for the 2011-12 financial year

Source: Thomas Cook

DIAGNOSIS BRAND HEALTH CHECK

Two industry experts on how Thomas Cook can attract British holidaymakers in the digital age

Garry Lace - Brand and marketing director, ENO (and co-founder of Campbell Lace Beta)

The words of former SAS Group chief executive Jan Carlzon - 'We have 50,000 moments of truth every day' - uttered en route to his transformation of Scandinavian Airlines, are the key to Thomas Cook's future.

Thomas Cook needs to identify its own moments of truth and focus on these.

When Beta was appointed in 2009, we told Thomas Cook it needed three things to drive its business: a brand campaign that connected emotionally with people; a world-class CRM programme; and a radical transformation of its retail environment and staff performance. My advice is the same now, only this time, Thomas Cook should follow it.

REMEDY

- Hire or partner some CRM experts to make the organisation genuinely customer-centric.

- Put in place a staff-engagement programme. Thomas Cook doesn't sell £300 holidays to Turkey. It sells the promise of the best week or two of someone's year.

- Never again put handwritten signs in shop windows, unless its ambition is to look like a local greengrocer.

Sam Turnbull - Marketing director, ACCA (and former marketing director, First Choice Holidays)

We all know travel is tough. Rival brand TUI has got its web channel well organised and offers a good breadth of products. Critically, it seems to have managed to integrate its various mergers and acquisitions to deliver a slick online experience. Thomas Cook still seems to be finding this a considerable challenge and customers will, inevitably, have noticed.

Also, holidays are expensive. Customers want to be sure they are going to get what they pay for, so spring is a bad time for travel companies to be getting any kind of negative publicity.

Once the tactical summer-trading challenges have been overcome, the opportunities to use the power of this brand for growth can be explored.

REMEDY

- Invest urgently in strong, reassuring messages for potential customers, covering Thomas Cook's financial stability and long-term future.

- Ensure good service delivery and sales effectiveness in the build-up to summer.

- Do whatever it takes to deliver an online experience that meets the high expectations of customers.

Discussion

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus
Brand Republic Jobs

subscribe now

Latest

John Lewis walks consumers through its history to celebrate 150 years of business
Waitrose boosts content strategy with 'Weekend Kitchen with Waitrose' C4 tie-up
Hottest virals: Cute puppies star in Pedigree ad, plus Idris Elba and Fruyo
Amnesty International burns candles to illuminate new hope
Toyota achieves the impossible by calming angry Roman drivers
Tom of Finland's 'homoerotic' drawings made into stamps
YouTube reveals user habits to appeal to 'older' marketers
Ex-M&S marketing chief Steven Sharp consulting at WPP
Wolff Olins reveals new CEO after Apple poaches Karl Heiselman
Glasgow offers £30,000 prize to best digital idea for 2014 Commonwealth Games
Google's revenues surge but shares drop as it grapples with transition to mobile
Facebook beats Twitter to most 'marketing friendly' social media site crown, says DMA
Fableists believe children like Finn should be outdoors enjoying life
Homebase, Baileys and Camelot join the line-up at Media360
MasterCard renews Rugby World Cup sponsorship to push cashless message
Lynx unleashes £9m 'Peace invasion' campaign
Social Brands 100 Youth: Pizza Hut most social youth brand in UK
Cheryl Cole is wild and arresting in new L'Oreal work
Morrisons told not to show alcohol ads during YouTube nursery rhymes
O2 head of brand Shadi Halliwell departs after 23 years at company in restructure
Tesco hit by further sales decline as it turns to digital Clubcard and social network
Branding guru Wally Olins dies aged 83
Duracell short film captures epic Transatlantic voyage
Ash runs Tinder experiment to show smokers are less desirable to opposite sex
British Airways teams up with Gerry Cottle Jnr for summer of rooftop film screenings
Arklu says 'girls can be superheroes too' with doll design competition
Coke enters squash market with Oasis Mighty Drops
Virgin Galactic signs up Land Rover as space flight sponsor
Motorola marketer Andrew Morley departs as Google gears up for sale to Lenovo
US Airways apologises after tweeting obscene image at a customer