How Could Travel Giant Thomas Cook Fail?

“They were never very good at digital,” said Rafat Ali, the chief executive of Skift, a New York-based media company that provides research and marketing services for the travel industry, “that’s fair to say.”

“The package holiday market has gotten squeezed because it is so much easier for consumers to pick the elements they want for a holiday, and for them to be able to pick them at a good price,” said Tim Davis, the managing director of Pace Dimensions, a consulting firm that advises travel businesses on how to adapt to the digital world. He pointed out that over the past decade, Expedia and Booking Holdings have come to dominate the market with their search capabilities. “Instead of moving in that direction, Thomas Cook moved toward the direction of being a tour operator. Although they had more control over it — by owning the hotels and the airline — the market has continued to get squeezed.”

Mr. Davis put it bluntly: “It is a market that is going to die, it is just a matter of time.”

Scott Keyes, founder of the air travel website Scott’s Cheap Flights, said the desire of millennials for more individualized journeys also played a role.

People can now do their own research, “find your own adventures,” Mr. Keyes said. “There’s new competition in tours and activities, whether its big players like Airbnb or smaller players, the market has gotten more difficult for tour operators because of this shifting taste. It’s not as necessary to book packages.”

The package business is also seasonal, said Mr. Ali, of Skift. “The problem is that packages have a very defined season. So if one season goes bad — maybe because the summer is too hot, or because a key market, like Egypt, is experiencing trouble — it affects the cash flow of a company like Thomas Cook very badly.”

In the early 2000s, Thomas Cook began moving into the airline business. The company slowly absorbed Condor, a Frankfurt-based airline that was formerly a subsidiary of Lufthansa. In 2003, the company began operating its own airline, Thomas Cook Airlines, a United Kingdom-based operation with 34 planes in the fleet traveling to 82 destinations.

Many experts pointed to that decision as a primary source of its troubles.

“It’s very hard to operate a travel agency, and it is very hard to operate an airline,” said Mr. Kerbey of the Travel Advisors association. “And the lessons you learn operating a successful agency do not always transfer to operating an airline. Both are independent, complicated businesses in their own ways.”

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