Analysts will be scrutinizing the collapse of British Travel Agency Group, Thomas Cook, for years to come. A number of reasons have come to the surface and been cited to explain its demise. These include a static business model, failure to speak to the demand of the evolving market, crippling debt, bad management, uncertainty over Brexit, and hot weather, among others.
While the Group's employees, stranded travellers, and travel industry as a whole reel from the closure of the Travel Agency giant, a key question becomes apparent; What can the ground travel sector learn from the Thomas Cook collapse?
No Business Is Immune To Disruption
When so-called industry giants are forced to close their doors, it often becomes apparent that disruption is at play. It is not news though, as the travel industry has been in the midst of it for the last two decades. The first Online Travel Agencies (OTA’s) started shaking up how travel was booked in the mid-1990s.
With their introduction, established companies were forced to reinvent the wheel and devise new business models to see them into the digital marketplace. Customers were becoming increasingly digitally proficient, and businesses who understood that made it through to the next round.
More Than Implementing Digitalization
A business’ technology stack is there to serve it. Incorporating technology into an operational strategy can automate organizational processes to improve efficiency and provide new revenue and more value to customers. Essentially, agile business practices come about through a combination of technology, organization, and process of change. This is known as digitalization.
It is not enough to simply adopt new software and digital practices though. The acquisition of MyTravel in 2007 saw the Thomas Cook Group become the largest OTA in Europe. However, even with access to better technology and significant market influence after the acquisition, the agency still collapsed.
Analysts have shared that this is because the travel industry giant did not consider evolving customer needs, or understand consumer behaviour. They continued to sell the same package holidays that had been on offer for the last few decades and did not allow for any personalization which is what the market was demanding.
It Is Time To Embrace Digital Transformation
Thomas Cook was an institution. It had been around since 1841, and up until September 2019, it was a travel industry icon throughout the United Kingdom and Europe. However, sometimes the biggest challenge arrives when an established business has to shift strategy to bridge the gap between its offering and customer expectations. Analysts cite the agency was resistant to change and fell short of meeting the evolving needs of the digital market.
On the other end, rising to meet the marketplace requires businesses to undergo digital transformation. Driving this is a change in the business model to adopt a customer-first mindset. In 1999 Jeff Bezos famously said that the focus for Amazon was to “build the earth’s most customer-centric company.” Today, Amazon is one of the Big Four technology companies along with Google, Facebook, and Apple.
From the start to the end of an interaction, businesses should be asking how they can improve the customer experience to win them over. Leaders in the coach bus industry should also approach this with a digital lens and explore top tier ticketing and reservations platforms to accelerate growth, provide more positive interactions with passengers, and continuously drive innovation in a digital age.
Championing The Change
Digital transformation is about people too. Process implementation needs to happen throughout a company in its entirety, as disjointed departments that embrace technology in varying degrees can cause overall inefficiency. Change has to happen throughout the company as a whole, from customer end to C level execs, front-line staff, etc.
Established businesses ready to implement the change need a leader to lay the groundwork. This could be the CIO or CTO who champions change at the grassroots level. The entire team needs to be taught the control and application of technology, and how it will collaboratively serve business outcomes.
Shift In Company Culture
For businesses that have been operating long-term, digital transformation could mean accepting a shift in company culture.
Firstly, it is framing the entire organizational outlook with the customer in mind.
And second, it is accepting that operational processes are going to change. The introduction of data gives a business greater autonomy over how it operates. For example, the analysis of reservations data may highlight route inefficiencies. This, in turn, can be used to adjust the timetable and improve ridership. Having access to data means that it should be acted upon to improve the bottom line.
Failure to undergo digital transformation is relegating your business to a decreasing customer segment. Thinking you are immune to disruption is a mistake, as can be seen with Thomas Cook.
As newer hungry businesses pop up to challenge the status quo, existing leaders have to meet the challenge themselves, or risk getting left behind.
If you want to hear more about our innovative online ticketing and reservations platform taking the coach bus industry forward, contact us for a demo today.