Thomas Cook looks online for UK boost as stores close

Thomas Cook is to relaunch its brand websites in a bid to drive 50% of its bookings online, a move that comes as the beleaguered tour operator unveils a range of cost cutting measures designed to restore investors’ confidence.

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E-commerce sites for the brands such as Thomas Cook and Going Places will be “upgraded” in time for peak new year trading with expectations that the investment will boost the current 25% of bookings made online to between 40 and 50% “over time”.

The move comes as the company announces the closure of 200 “under performing” shops and a promise to review the remaining portfolio as custom moves online.

Investment to modernise remaining outlets will be made to ensure the “brand retains customer appeal”.

The move is part of a wider turnaround plan that will also see the closure of 500 hotels and a slimming of its airline fleet to 35 from 41. The company, which secured emergency funding from banks last month after reporting a sharp dip in the performance of its UK business, says the cuts will save £110m per year.

Perception of the company’s brands was damaged in wake of its financial woes but YouGov BrandIndex data shows that consumers’ impression of the brand has recovered since news of the financial rescue package emerged.

Its “general impression” score was -6.9 yesterday (13 December), up from a low of -11.1 on the 5 December.

Thomas Cook’s index score – an average of how customers rate the brand in terms of impression, quality, value, reputation, satisfaction and whether they would recommend the brand – has also improved, up to 3.1 from a low of 0.5.

Sam Weihagen, group chief executive of Thomas Cook, says that customers have been “very supportive” and that bookings have “recovered well” following a dip in November.

He adds: “For over 170 years Thomas Cook has provided customers with fantastic holiday experiences and we will continue to do so.”

The company said operating profit fell 16% to £304m in the year to 30 September, blamed on a fall in income from its UK business. Revenue was flat at £9.8bn.

By contrast, main rival TUI Travel reported a “record” £471m operating profit for its full year last week.

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