Analogue Travel Giant Thomas Cook Fails Miserably In The Digital World

1

October

2019

5/5 (1)

Thomas Cook’s bankruptcy was all over the news in the last week of September. The travel giant employing 22.000 people worldwide (BBC, 2019a) failed to keep up with the digitalization of its industry and had to cease operations. New entrants, such as Booking.com, Airbnb and Expedia disrupted the travel industry with digital platform solutions. Thomas Cook is the first analogue giant we see to fail but probably not the last one.

The 178 years old conglomerate started off in 1841 by organizing railway outings for the members of the temperance movement in Market Harborough (BBC, 2019b). The company’s core competence remained the same ever since. Thomas Cook was organizing journeys for the public taking care of every little detail. The package tour concept required a vertically integrated firm managing flight, hotel and restaurant bookings and arranging activities for the traveling customers. As BBC (2019b) notes, the company diversified in the early 2000s’ and started to operate its own airline managing a fleet of 34 aircrafts as of 2019.

Financial markets have been signalling the potential catastrophe of the firm. Their stock price has been sharply decreasing from 136 GBP in May 2018 to zero by September 2019 (yahoo! finance, 2019). The firm has been struggling with restructuring itself while analysts were worried about the frequent exceptional one-off items on the P&L accounts which is always a red flag (BBC, 2019b). Thomas Cook accumulated £1.7bn debt and announced the need to secure £200m of extra funds to prevent bankruptcy (Bailey, 2019). Financiers have lost faith and refrained from further investments.

What were the root causes of the flop of this established British giant with a strong brand and huge customer base? The travel bookings business has moved online at a glance, but Cook’s business remained offline, operating 600 physical stores (Sims, 2019). In the pre-online era Cook’s business model was based on filling the information asymmetry between travellers and destinations. The rise of internet penetration and online platforms dramatically cut search costs for the end users. Thomas Cook also functioned as a platform. A platform far behind its online competitors in efficiency and scalability. Providing trustworthiness also ceased to differentiate the company from competitors as people rely on online review sites such as Yelp or Tripadvisor nowadays.

Besides missing the digital transformation of its industry, Thomas Cook also failed to recognize that changing consumer tastes made their package tour proposition less and less appealing. Millennials admire freedom and prefer to plan their trips themselves. Online competitors decoupled Cook’s business model and youngsters prefer to put their itinerary together using multiple service providers. No doubt that it is hard to imagine a group of teenagers sitting in a Neckerman office flicking through a magazine before consulting with their designated travel agent on which flight to chose for the weekend’s trip.

References

Bailey (2019) Thomas Cook Goes Bankrupt Leaving 600,000 Passengers Stranded https://simpleflying.com/thomas-cook-goes-bankrupt/

BBC (2019a)  Thomas Cook collapses as last-ditch rescue talks fail https://www.bbc.com/news/business-49791249

BBC (2019b) Thomas Cook: What went wrong at the holiday firm? https://www.bbc.com/news/business-46452374

Sims (2019) How Could Travel Giant Thomas Cook Fail? https://www.nytimes.com/2019/09/23/travel/why-thomas-cook-travel-collapsed.html

yahoo! finance (2019) Thomas Cook Group plc (TCG.L) https://uk.finance.yahoo.com/quote/TCG.L

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13 startups you should know about before planning your next trip

4

October

2016

4.82/5 (22)

We are all familiar with start-ups like Airbnb or old players like Expedia when it comes to traveling. But there are much more companies on the rise that can help you a lot in all aspects of traveling and make everything a bit more convenient. From planning and booking your trip to help you out in case of flight cancellation, there seems to be a great start-up for everything nowadays. If you’re about to plan your next trip, feel free to get some new inspiration on which apps to use from this list. Also, if you had great experiences with apps that are not included in this list, feel free to add them to the comment section below.

 

Planning your trip:

Flights:

Hopper – For finding the right dates to fly and the right date to book

Hopper is a flight-search engine that relies on data of trillions of flights they’ve collected and analyzed in the past. It lets you search for your itinerary and then tells you some useful information such as what a good deal on this particular route usually is and at what dates you are able to get the best deal. With all their analyzed data the app will also tell you if you should book right now or wait for a later date when the flight will be cheaper. They claim to have 95% accuracy in predicting flight prices, so it is definitely worth to check it out.

Hipmunk – Use chat bots to book your travel

Do you miss the old times when you would just walk into the next travel agency and discuss your plans with a travel agent? Good news, with the rise of AI and chat bots you can now chat with a computer about your travel plans. If you are curious and want to give it a try, head over to Hipmunk and try it out.

Screenshot 2016-10-04 18.07.55

 

GoEuro – Multi-modal travel search engine

If you are traveling on a budget or you just want the quickest option to go from A to B then GoEuro might be the right choice for you. The platform is a multi-modal travel search engine, which means you only need to specify your Destination and GoEuro will give you an overview about all means of public transportation to get there. It compares prices as well as total travel time for train rides, bus rides, and flights. The platform automatically includes transit time to get to the airport and gives you the option to sort all options based on your preferences. They are pretty successful and just scored $70m for their series C funding from investors to expand their services further. You can check them out here.Screenshot 2016-10-04 18.19.45

 

Accommodations:

TalkTalkBnb – a social network for traveling and learning languages

During my research for this post, I found TalkTalkBnb, which I think is fantastic. The service is a mixture between AirBnb and Couchsurfing. Travelers can sign-up, list their native language and where they’d like to travel. Hosts also create a profile, which lists the language they’d like to learn. Travelers are offered free accommodation in exchange for only speaking their native language throughout their stay so their hosts can really practice without with pricey language lessons. I think the concept is a great way to get in touch with local people and to travel on a budget. If you’re as eager as me to try it out, head over to www.talktalkbnb.com.

 

Plan the whole trip:

tripl – big data startup that predicts your next travel destination

tripl is a German start-up that will suggest you travel destinations based on your profile on facebook. They will analyze your likes and your posts from the pasts to find the right vacation for you. Their website definitely looks very appealing and I liked the recommendations they gave me. If you want to check it out head over to www.tripl.de

 

Travelcircus.com – full-service booking platform for exclusive weekend short-trip packages

Travelcircus gives you handpicked weekend getaways and I had to include this because the co-founder is indeed a former BIMer! He graduated two years ago here at RSM and is currently the Head of Operations of travelcircus in Berlin. The concept is pretty unique, you can just pick a city and the website will suggest you places (and nice hotels) where you could go for a weekend. You can find it here.

 

Activities:

Rungoapp – running app with offline turn-by-turn voice directions

Have you ever been in a foreign city and wanted go for a run without getting lost? With rungoapp, you can just pick a route and you will get turn-by-turn voice directions so you don’t get lost. The app works even offline so you don’t have to worry about your phone bill at the end of the month. You can check it out here.

Screenshot 2016-10-04 20.16.20

 

bimbimbikes – online search engine for bike rentals

Bimbimbikes lets you compare prices for local bike rentals and you can even reserve your bike and pay in advance. So if you’re used to biking everywhere you go and you don’t want to change this habit when you’re on vacation, this is a must have for you!

 

Komoot – plan you next hike or bike tour

Komoot is a great app if you want to go outside and be active during your vacation. It doesn’t matter if you’re into hiking, running or biking, with this app you have access to great routes wherever you are. They have very detailed maps that have information that Google or Apple Maps not have so that they can always come up with bike-friendly streets for example. If you want to read a detailed review follow this link, otherwise you can download the app here.Screenshot 2016-10-04 19.17.50

 

 

Photography:

Fripito – photography guides by locals

If you are into photography and also like to travel a lot, then Fripito might be for you. Fripito is a mobile app that gives you photo guides made by locals from hundreds of destinations around the world. These guides include tips on where to find interesting spots, local light conditions, recommended equipment and camera settings. If this sounds interesting to you, head over to Fripito to read more about it.

 

The roll – organise your photos smarter
Not sure which picture you want to instagram? Or do you want to show your friends the photos you took on vacation but exclude all the embarrassing selfies and photos of your food? Then “The Roll” might be the right app for you. The app uses image recognition technology and machine learning that not only group photos based on their content but can also highlight the best ones. Photos are automatically tagged and displayed in categories so you can search and share without clutter. I’ve used this app for quite some time now and the algorithm works really well, I definitely recommend you to check it out. As of now they only offer an iOS app, that you can download here.Screenshot 2016-10-04 19.32.55

 

Save money when traveling abroad:

There is already a post about this topic so if you think your bank asks a little too much as soon as you leave the country, check out this blog post

 

Back home:

Get refund for delayed or cancelled flights

There is this one thing when traveling, that has the potential to ruin basically every trip: delays and flight cancellations. But especially for somebody that is flying on a budget, delays and cancellations don’t necessarily mean only bad news. There is a EU regulation in place that can make you entitled for up to 600€ in case your flight was canceled or delayed. But airlines are systematically fighting this regulation and as long as you don’t get yourself a lawyer you probably will never see a penny. However, I wouldn’t bring this issue up here, if there is not a startup that proposes to solve the problem. Basically, there are two different ways you can cope with this issue. You can go to Flightright and they will use their lawyers to fight for your compensation. If they are successful and the airline finally pays out the refund, they will keep 25% of the sum and you get the rest.

In case you don’t want to wait that long you can just head over to WebuyyourFlight.com. They will check your claim within 48 hours and immediately send you up to 400€ for your flight if your claim was valid. You don’t have to wait for their legal team to get active, instead you will get the money right away. Bear in mind though, that you would get more money from Flightright, as their fees are lower than the fees of webuyyourflight.com.

 

I hope this list will help you for your next trip and you will try out some of the apps or services. Please feel free to add more start-ups to the comments that you think should be in this list !

 

 

References:

GoEuro banks another $70M to keep building out its travel planner platform

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Have printed travel guidebooks come to an end?

27

September

2016

No ratings yet.

Almost all travellers have them on their bookshelf: Lonely Planet, Rough Guide and many other travel guide books. These guidebooks have been important information sources for travellers all around the world. But with smartphones, tablets and websites such as Tripadvisor.com are printed travel guidebooks still relevant?

 

Up-to-date information

First of all, it is very costly for publishers to keep travel guidebooks up-to-date. In addition, in this fast paced world a travel guidebook is already outdated before it even hits the bookshelves (Hodson, 2012). As a traveller in a foreign country relying on the information in these books it is important to have up-to-date information. It is such a shame when you have travelled so far for a particular restaurant or sight mentioned in the book, only to find out it is not there any more. Sales of printed guidebooks in the U.S. have been declining since 2007 (skift.com, 2016). This is an indication that the demand for travel information is shifting from offline to online. On the internet you can find up-to-date travel information on tour operators, restaurants and hotels, because information can easily be edited. There is a growing amount of apps, websites and blogs filled with travel related topics. Also, the information you find on the internet is at no extra cost, while a guidebook can easily cost you a lot of money.

 

Opinions of hundreds of travellers

Furthermore, a problem with printed guidebooks is that only one writer or a couple of writes decide which companies make it into the book. Their opinion can be ambiguous. While travelling though South America, I have heard stories about authors writing about places they have not even visited. Whereas on a website such as Tripadvisor.com travellers can read reviews and opinions of hundreds of travellers. There is a shift in what is important for the travel industry. Before they had to focus on getting into a popular guidebook to try increase sales but now ratings and reviews are popular as ever. It is not uncommon that a tour operator or restaurant owner will ask you to please write a review for them on Tripadvisor.

 

In my opinion, the answer is no. Printed travel guidebooks are no longer relevant. You can find so much more information on the internet. It is easy, cheap and the information is up-to-date. Why would you still carry guidebook kilo’s in your backpack?

 

 

Sources:
https://skift.com/2013/03/04/lonely-planet-and-the-rapid-decline-of-the-printed-guidebook/

http://www.goseewrite.com/2012/02/guidebooks-overrated-travel-resources/

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