12 Jul 2019
Posted in Press Release
Thomas Cook has no choice but to undergo radical change after Fosun deal is agreed
Thomas Cook has today (12 July 2019) confirmed talks over a rescue deal with Fosun.
Johanna Bonhill-Smith, Travel & Tourism Analyst at GlobalData, a leading data and analytics company, offers her view on the news:
“Thomas Cook CEO Peter Fankhauser has confirmed that he is seeking a solution that will allow the company to continue trading in the short-term. Yet the reality is that the CEO had no choice but to consider any deal that was put on the table.
“Ultimately, Thomas Cook is in the position it is because its business model has not majorly evolved since it first began as a typical all-inclusive package holiday tour operator. It has failed to adopt strategies to counter the threat of disruptors such as Airbnb and change is now a necessity for the company to succeed.
“The deal with Fosun will provide at least a stay of execution, providing funds to carry on trading as normal over the winter period, but in the longer term there will be drastic changes. If this collaboration is to be truly effective, Fankhauser alongside the rest of the Thomas Cook Group, need to be fully prepared and ready to accept radical change that is ahead. As a modern international investment company, Fosun may encourage Thomas Cook to enhance booking online, causing even more job cuts and future store closures.
“If a deal is struck Thomas Cook will have to let Fosun take the reins, but cultural clashes due to business norms or an overriding strategy could mean the deal causes more problems than it solves.
“Fosun sees value in the traditional tour operator because of its strong brand and global image and is confident of a return on its investment, provided it can impose its preferred operating strategies. On the other hand, Thomas Cook sees the deal as a last chance for the company to remain alive within a highly competitive environment.”