Thomas Cook bosses were stuck in the past – its downfall was inevitable

In a market increasingly concerned with customer service and online competition, it is clear the travel agency lost its way, writes Chris Blackhurst

Thomas Cook was one of the last travel agencies to keep stores on the high streets (iStock)

A few years ago, I was asked to assist Thomas Cook on a media crisis engulfing them after the deaths of two children on one of their package holidays. The children, Christi and Bobby Shepherd, aged six and seven, died of carbon monoxide poisoning from a faulty hotel boiler while on holiday in Corfu in 2006. A very public row developed over the firm’s handling of the tragedy. One of the central charges was that no one senior from Thomas Cook had met the children’s parents.

By the time I was involved, a new CEO, Peter Fankhauser, was in charge. But the backlash against Thomas Cook had not gone away – in fact, it was worsening. We suggested to Fankhauser that he should show his human side, that he should meet the parents, and tell them how he shared their pain.

He did, and it worked. Suddenly, at least where the claim the company was uncaring was concerned, a cloud was lifted. It was brave of Fankhauser to see them. He did so in the full glare of publicity, knowing that emotions were running high, and, even though it was a private meeting, fully aware that anything he said might be made public and be open to misinterpretation.

This week, Fankhauser was once again confronting the cameras and journalists, as he declared his sorrow and sympathy for customers and employees over the demise of Thomas Cook. He was right to do so.

What jogged my memory, though, was Fankhauser’s isolation. Of the holiday company’s chairman, Frank Meysman, there was neither sight nor sound. He was not flanking the CEO as he came out to face the world, he did not stand alongside, supporting him – and being seen to take his share of the responsibility for the collapse. It appeared as if it was Fankhauser’s firm that had gone under, his consumers who had seen their holidays ruined, his workers who were now unemployed. Where was the board? Where was the chairman?

A Belgian career businessman who worked with Procter & Gamble, then chaired a Dutch engineering consultancy, Meysman struck me as an unlikely head for Thomas Cook. Even in our brief encounter, he seemed driven by process, and the need for caution, and a long way from the fun in the sun packages the company liked to sell.

Meysman was not happy about Fankhauser seeing the parents. He’d been chairman since 2011, and so in situ much longer than Fankhauser. Yet, in those previous three years, as Thomas Cook’s reputation was being torn to shreds, there had been no attempt to meet them. Now, when it was proposed, Thomas Cook’s lawyers did not like it – they were nervous about the legal implications.

That was where Meysman stood. The move went against his conservatism. It was not legally necessary, and carried plenty of downside, so should not be tried. But this was a people business, and at that moment, Thomas Cook was being portrayed as lacking in humanity – the brand’s values were being completely demolished.

Claims that it was not technically anything to do with Thomas Cook, since it was the hotel’s boiler that had malfunctioned and the hotel did not belong to the holiday operator, we argued did not wash. As far as the family was concerned they booked a Thomas Cook holiday – who actually owned the hotel never crossed their mind, and if it did, they were assured by the presence of the famous, respected Thomas Cook name.

The reasons for Thomas Cook’s liquidation are well-aired: it had a mountain of debt; the fine margins that it was required to adhere to could not withstand blips, never mind serious dips, in demand; weak customer confidence; pressure on the pound; and an improvement in UK summer weather.

Those factors affect other companies, however, and they have not gone under. It’s true that Thomas Cook was especially exposed, and its borrowings were colossal, but there is another, fundamental reason for its catastrophic fall: the brand had lost its way.

It was solid, and well, boring. While rivals displayed quick movement and flexibility in their choices of destinations, the experiences on offer and the length of duration of stay, Thomas Cook, the oldest holiday firm, the one that started the entire industry back in 1841, stuck to a rigid, increasingly tired, format. Holidaymakers were forced to book one week or two, not five or 10 days or any period they chose, as they could with competitors.

Once, the high street would contain several travel agents. Gradually at first, and then, with increasing rapidity, they virtually all went. All that is, except Thomas Cook. Families would enjoy booking their seats, rooms and rental cars together online. Thomas Cook preferred that they trekked into the nearest branch, maintained at vast expense, as they’d always been asked to do.

A huge opportunity, to position Thomas Cook as a pioneer, as it once had been, to make it a match for the likes of easyJet, was lost. There was no radical thinking at the highest level, no striking out, no excitement. The company failed to keep pace with the change that was occurring elsewhere, and fell behind.

Who is to blame for that if it is not the chairman and the board? Thomas Cook was not well served by those in ultimate charge. I’d had an inkling of that before, and Fankhauser’s more recent lonely appearance confirmed it.