It’s the internet, stupid

IT is hardly surprising that Thomas Cook is closing 200 shops. Its branch network, which swelled to 1,350 following its ill-judged merger with Co-operative Travel, is simply too big.

The real problem is that the travel agent will struggle to replace forfeited revenues because its online platform and product is not fit for purpose.

As early as 2007, more than half of consumers started buying their holidays online. Today, that number stands at 68 per cent, according to Ipsos Mori.

Yet Thomas Cook sells just 25 per cent of its holidays over the internet, a staggeringly low number when one considers the huge structural change that has taken place in the travel industry. Compare that to nearest rival Tui Travel, which sells 40 per cent of its holidays online.

It's not a platform problem alone. Thomas Cook's product – one-size-fits-all package holidays – is hopelessly ill-suited for today's traveller, who wants unique, bespoke holidays.

Closing the shops is only half the answer. Building an internet business – years too late – is the next daunting task.