Thomas Cook shares collapsed today after the tour firm announced it wanted to borrow another £100m from banks to help it get through winter. What does the future hold for the UK’s oldest tour operator?
The value of Thomas Cook’s shares fell by more than two thirds as investors sold them off in reaction to the company asking for more cash on top of debts already touching £1 billion.
If investors are extremely nervous, customers are now worried too. What will it mean for holidays you’ve already bought with Thomas Cook? And should you still make bookings with the company?
Thomas Cook hopes to calm those fears, with its interim chief executive insisting that the company is a ‘robust business with a great future’.
Turbulent times for Thomas Cook
Whatever happens to Thomas Cook, the vast majority of its holidays are covered by the industry’s financial protection scheme Atol, so you shouldn’t lose out.
Yet, with rumours that hundreds of Thomas Cook shops are going to close, today is a grim day in the operator’s 200 year history.
The company started package holidays in the UK, selling train trips to the coast, and it’s dominated the British travel industry ever since. However, the past few years have brought unprecedented challenges:
- The rise of internet and no-frills airlines has encouraged people to put their own holidays together, rather than using a travel agent or tour operator.
- The prolonged downturn starting in 2008 caused a big decline in holiday bookings.
- Some of the few areas seeing growth – North Africa and the Middle East – were hit by political upheaval.
Will you head for the emergency exit?
On the other hand, maybe you think we need to look closer to home for Thomas Cook’s troubles. Rather than purely blaming outside events, does the company need to look at itself?
Some online commenters have complained about poor service and high prices, suggesting Cook had only itself to blame. Others have said the company has been hurt by government taxes on flying.
And what happens now? Will you steer clear of Thomas Cook because of the uncertainty surrounding the company – making a bad situation worse? Or will you rally round to support what was once a British institution?