Thomas Cook bankruptcy alert old may-not survive under new market, management failing to bring digital transformation for new market reality. This is the conclusion made base on current headline for travel news is about long established 178-year-old travel company and airline company declared bankruptcy, on 23 Sep 2019, after failing to reach a last rescue deal, impact 600,000 travellers, include 150,000 British customers now in vacation spots across the globe require repatriation. Thomas Cook Group, including the UK tour operator and airline, has ceased trading with immediate effect. All Thomas Cook bookings, including flights and holidays, have now been cancelled.
From all sources, business fail due to high debt levels, online rivals and geopolitical uncertainty, it needs additional 200 million pounds on top of existing 900 million pound package, for going through the winter season, when it traditional receives less cash and must pay hotels for summer seasons. Fosun Tourism’s parent company, Fosun International, is one of China’s biggest conglomerates — it owns all-inclusive holiday firm Club Med. Billionaire founder Guo Guangchang is Thomas Cook’s is the largest stakeholder of Thomas Cook.
Thomas Cook incident like wake up call for those old and established, but non well perform giant company, once financing and loan stop, or accumulated in aggregate just too much, banker and investor got to let go and face the reality, as no more viable to keep injecting finance resources into company that can not be cope with modern business reality. For those old and long established company particular had the “leader pride” and hard to let go, or top leader and management just can’t let go of the past glory and living in the shadow of the past. Once the old business model can not be re-invented for the modern and future relevancy, revenue generated not enough to cover the operating overhead, and finally reach the threshold for investor need to face the reality to let go, and stop injecting further for the financial resources due to negative return on business investment. Thomas Cook declare bankruptcy just beginning, as expected for other related company involved funding by it will start to make it impact, it just like a domino effect, one after another under chain-reaction manner.
Global market and spending on travel and tourism keep expanding, but it matters for who capture it and who lost it. Market is operating in simple principle, market demand and supply, value innovation along the years that bring into travel industry and sectors, we saw the rising of new players, and off course we saw falling of those who no more value added in the industry and sectors.
As company possess so many resources, it well equipped and well know how the market is changing, but business model and engine just either the top leader and management refuse and adapt the change, and entire company, from top to bottom, is slowly moving toward extinction. But due to the size, it actually accelerate with the overhead and debt accumulation, and make an impact soon and in the threshold beyond manage, or too late to intervention. It is a sad story, but we had heard it before, from time to time, across industries and sectors, we hear it before Kodak, Nokia (in the past) in modern times, Rome Empire in the historical time, and similar story keep repeating it. No company can immunised from the change, top leader and management may not know everything, and if the refuse adapting to the change and can not accept new generation of professional to make the change, fall it matters of time.
Digital Transformation (DT) is impact every industry and sector, top leader and management do not know how it impacts on the business now and in the future, you are better to learn it and master it, if you are not willing to let go and let the new generation of tomorrow leaders and management to make the change. And the change is now, in the internet speed, or someone else will step in, do what you refuse to do, and we all will see what happen. E-SPI being active in assisting enterprise and government customer adapting for various digital transformation technology for the various use cases and business scenario and context. Feel free to contact E-SPIN to see how we can value adding in your business together.
