The Platform Economy: Lessons we can learn from the demise of Thomas Cook

Person standing and reflecting in front of beautiful mountains and a fjord.

 

The Thomas Cook demise was a calamity for the travel industry.

People will call it a victim of the digital age, a sad parable in the unforgiving march of progress.

And while it’s true that changing attitudes to booking holidays are part of the story, it’s not the only reason for Thomas Cook’s closure.

Thomas Cook itself named a few different factors for its falling profits and mounting debts: adverse publicity in the media; the heatwave of 2018; Brexit uncertainty.

But another factor was the business’s inability or unwillingness to move with the times. It retained its traditional business model of selling package holidays, favouring the face-to-face approach preferred by many of its loyal customers. It spent millions opening up brand new shiny travel shops in the last years of its life, even while its debts were ramping up.

But is it possible that it could have done that, and still kept up with changing technology, to make the best of both worlds?

Before consigning it to the history books, there are plenty of lessons we can learn from the demise of Thomas Cook.

The platform economy

Choice of a platform economy

We live in a platform economy.

It’s not just the internet that has killed Thomas Cook: in the platform economy, it’s not enough simply to be online. Thomas Cook was online, and sold a lot of holidays through its website.

But what kind of holidays was it selling? Package holidays, put together by Thomas Cook. Really lovely holidays, no doubt – quality holidays, quality-controlled, checked and approved by Thomas Cook representatives. But, even so, they were holidays with limited choices of destinations, flights, transfers, hotels and attractions. Ensuring customers would almost always have to compromise in some way.

Compare that to modern linked travel arrangements, enabled by the platform economy. It opens up another world of choice for holidaymakers – a world that will continue to grow, as digitally empowered travellers increasingly want to be their own travel agent, with the option to pick and mix. This freedom of choice is important now.

Just look at the popularity of Amazon, Deliveroo, Booking.com. Think about what they sell – consumables, food, hotel rooms. Think about who they connect – business to business, or business to consumer, or simply person to person.

These are some of the biggest brands in the world, and what are they doing? Deliveroo doesn’t cook food. Booking.com doesn’t own hotels. They are simply making life easier, more convenient, for their users.

By using technology, they are bringing together huge reams of choices – choices that have only increased since the dawn of the internet age – and making it far easier to access them. Easy to the point of a couple of clicks to order takeaway food. And they are massive, because there is global demand for that convenience.

Holidays are a major burgeoning market for the platform economy. And Thomas Cook, instead of recognising that and reshaping the way it packaged and sold holidays, remained committed to its business model – beloved by many of its customers as it was – of selling people a holiday that they didn’t quite want.

Clever platforms can bring together a host of different suppliers in different areas – including for flights, transfers, hotels and attractions – into one easy-to-use booking website or app, using APIs.

What is an API?

An API (short for Application Programming Interface) is a clever bit of software designed to make building websites and apps easier for developers. A web API can be issued by an enterprise for use by different apps: for example, a bus company could create an API of its bus timetable and pricing data, and a developer could use it to build a journey planning app.

Application Programming Interface Collage in 3d

Platforms like TripCenter, allow customers to search for chauffeured ground transport across the globe, have their own single source API. Travel agents can easily integrate the API within their own websites, allowing them and their customers to search its vast database on the same site. TripCenter’s intuitive search engine allows customers to easily search for a chauffeured vehicle with whatever criteria they wish – number of passengers travelling, price, make and model of vehicle, age of vehicle, and added extras – from air conditioning to hot water dispenser. The customer can pick and choose as easily as ordering a takeaway.

 

Imagine if a travel agent choses to combine this API with APIs from the likes of Booking.com for hotels, and Expedia for flights. In a few clicks, customers could search for exactly what they want in destination, accommodation, departure point and transport to and from the airports, and would have a much wider choice of possible holidays. Subtly different from package travel, this is linked travel – and it’s the future.

For service providers as well, the platform approach is a future-proof method of growing your business. By choosing a partner that is committed to an economy built around open APIs, even the smallest supplier can grow with confidence.

A ground transport business may want to expand into new countries or markets, for example, but is reluctant or unable to buy or build the necessary technology in-house. With the platform economy, there’s no need to.

Working with a proven expert in ground transport, such as TripCenter, fleet operators and private charter bus hire companies can be assured that the technology they are using will be fully scalable, with direct access to customers worldwide, and offer the most effective and transparent prices to customers.

The technology is getting better all the time. And in the platform economy, it’s not just choice, but ease of choosing, that will determine the most successful brands.

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