Rumours of Thomas Cook revival may concern competitors

Having been one of the UK’s largest operators, Thomas Cook may benefit from its strong brand image when traveller confidence returns. Credit: TK Kurikawa / Shutterstock.

News of the potential revival of the prominent travel brand Thomas Cook will further rattle operators in their bid for a successful recovery. Having been one of the UK’s largest operators, Thomas Cook may benefit from its strong brand image when traveller confidence returns.

Revenues have been decimated due to Covid-19 and operators continue to struggle, facing continuous hurdles due to quarantine and travel restrictions across a range of source markets. Store closures, redundancies and the most recent demise of STA Travel reflect the hardships felt by intermediaries and operators.

Lack of differentiation and online innovation were some of the key downfalls for Thomas Cook. Rumours now suggest it will be a sole online operator, incorporating an asset-light business model. Significant investment in marketing will be critical to negate any remaining negative sentiment towards the brand after its collapse.

Relaunching as a sole online operator

A mountain of debt was one of the primary causes for the operator’s downfall, but lack of innovation and online investment were other key contributing factors.

Having held approximately 550 retail outlets, the operator relied on the high-street market. Prior to the pandemic, only 17% of the UK traveller market declared they would book their next vacation with an in-store travel agent, while 39% opted to book with an OTA (GlobalData UK consumer survey Q32019). Covid-19 has accelerated online consumption and this trend is highlighted in GlobalData’s most recent survey (week 6 UK consumer recovery). 41% of UK travellers now declare they will buy more products online rather than in-store.

Significant marketing and promotion will be crucial to battle the remaining negative sentiment

The package holiday operator left 150,000 UK holidaymakers abroad when it collapsed causing the largest peacetime repartition for the UK (according to official government website).

If the brand relaunches, strategic marketing and promotion will be key to negate any remaining negative consumer sentiment. The Chinese conglomerate, Fosun International who bought the brand, declared plans were to relaunch during what would be the operator’s 179th anniversary. While this may be postponed until 2021 due to the current state of the UK travel industry, Thomas Cook will likely be in a better position having not had to withstand the travel crisis created by Covid-19 and the detrimental impact it has created on revenues for its potential competitors.

A newfangled Thomas Cook, which has not had to deal with the hardships caused by a global pandemic, will no doubt cause apprehension for operators that are now in a fierce, long-term battle to capture the slowly returning demand that may not reach pre-Covid-19 levels for a number of years.

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