Traditional Culture Encyclopedia - Tourist attractions - The British travel agency giant went bankrupt and hundreds of thousands of tourists were stranded overseas. Why did this travel agency go bankrupt?

The British travel agency giant went bankrupt and hundreds of thousands of tourists were stranded overseas. Why did this travel agency go bankrupt?

On September 23, 2019, Thomas Cook, the oldest travel brand in the UK, declared bankruptcy. This tragedy also stranded more than 600,000 passengers around the world. For this reason, the British government also implemented the "largest travel crisis in British history". "Peacetime evacuation operation", also known as "Operation Matterhorn".

This tragedy was unexpected by us, and the consequences it brought were also very serious. Many people lost their jobs, partners and stakeholders broke down and cried, etc. Since its establishment in 1841, Thomas Cook has always been one of the most popular travel agencies in the world because it has a complete tourism system and receives up to 19 million tourists every year. It is the world's largest tourism brand.

So, what caused this tourism giant to collapse overnight?

In fact, everything will have a process, and Thomas Cook’s bankruptcy has long been expected. In 2007, it merged with UK-listed MyTravel Group, which nearly went bankrupt in 2011. This transaction also saddled Thomas Cook Group with 1.7 billion pounds of debt.

At the beginning of last year, we can see that Thomas Cook’s market value exceeded 2.5 billion pounds. However, in just 11 months, the market value dropped from 2 billion pounds to 550 million pounds. Thomas Cook The group's direct losses amounted to 163 million pounds.

We can learn that Thomas Cook’s operating performance has always struggled on the profit and loss line, and his asset-liability ratio has reached an extremely dangerous level of over 95%. In the first half of 2019, Thomas Cook suffered more serious losses, amounting to 1.5 billion pounds. His negative asset ratio was also very serious, and the problem of insolvency became increasingly prominent.

Obviously, his direct reason was Thomas Cook's failure to successfully obtain financial bailout, but this alone is not enough to bankrupt a large company. There are also other influences, including geopolitical turmoil, heavy debt, the growth of the Internet economy, and the onset of heat waves, which all together ended Thomas Cook's golden age.