Where do you go on a winter holiday if you’re chief executive of one of the world’s largest travel companies? The options are endless. Some Christmas sun in the Canaries or relaxing on a remote paradise island, perhaps. Or flying to up-and-coming destinations such as San Francisco and even China?
With the nights still dark and the forecast showing rain for Christmas Day, it’s not surprising that a quarter of summer holidays are booked at this time of year.
For Thomas Cook boss Peter Fankhauser, out of the 72 destinations the firm flies to, the best holidays are spent at home, which in his case means Switzerland.
Peter Fankhauser: Since becoming the CEO in 2014 Thomas Cook has teamed up with Expedia
He is flying off to his native country for three weeks of skiing and snowboarding with his wife Rafaella and son and daughter, aged 15 and 11. For someone who usually travels three days a week, just the idea of being in one place for that length of time is sheer bliss.
‘I find being in nature and in the mountains so relaxing,’ he says. And while he might be the boss in the workplace, he rarely gets to choose the destination for family holidays. ‘If they are happy, I am happy,’ he says diplomatically.
But wherever he goes, Fankhauser, 57, has exacting standards. Under his leadership Thomas Cook has slashed the number of hotels in its portfolio from 10,000 to 3,000 – and he insists he knows what makes a decent stay.
‘A friendly welcome is most important,’ he says, perhaps stating the obvious. A more personal pet hate is when there is not enough room for toiletries around the bathroom basin. He’s also peeved if there is nowhere to stow his luggage.
For many people the words ‘package holiday’ conjure images of ultra-early morning flights, never-ending coach transfers, crowded pools, grubby rooms and cold buffets. Popular in the 1970s and 1980s as holidaymakers sought sun, sea and cheap sangria, companies such as Thomas Cook and Thomson became synonymous with a ‘pile it high, sell it cheap’ approach to travel.
Yet, sitting in the cobbled courtyard of a boutique hotel in Palma, Majorca, in the shadow of a breathtakingly beautiful 400-year-old cathedral, festive fairy lights twinkling in dainty olive trees, it seems Fankhauser is doing all he can to shake off that image.
This hotel is newly available to Thomas Cook customers through its recent tie-up with online agency Expedia. Oozing chic, it’s not a venue you would typically associate with a package tour operator. The business was on the brink of collapse in 2012, but since then has had a financial makeover to shed £1.6 billion of debt as well as moving its holidays upmarket.
CHIC: Thomas Cook’s boutique hotel in Palma shows how the firm is reinventing itself
Since becoming chief executive in 2014, Fankhauser, who earned £1.8 million last year, has halved the number of Thomas Cook’s high street travel agency stores, opened up new long-haul routes, expanded into China and teamed up with Expedia to try to crack the city break market.
‘The first question I was asked when I joined this industry was: is the package holiday obsolete? That was 28 years ago and it is a question which has followed me ever since,’ he says. ‘If we were still just offering seven-day mass market packages we would have a tough life. You have to see what the customer wants and to innovate.’
And what customers want is changing. The need to be individual and tailor holidays so they are unique is more important than ever before, and stylish surroundings go without saying.
It’s easy to think that such a thing is beyond the reach of a package tour operator. Thomas Cook is harnessing technology to try to differentiate itself from rivals. Online video hotel tours and the ability for customers to choose the specific room they will stay in help to personalise the booking process. Hotels themselves have become posher, with ‘swim-up’ pools so you can doggy-paddle right to the doorstep of your own room.
Is it working? Thomas Cook returned to profit in 2016, five years after its brush with collapse, when its business was badly affected by the Arab Spring and flooding in Thailand and it had to be bailed out by banks. It currently has 22,000 employees.
In the year to September, it disappointed investors as its UK earnings fell 34 per cent due to the falling value of the pound and tough competition for Spanish holidays, although its overall profits across all markets rose by £12 million to £46 million. The company has cleaned up its balance sheet, dramatically reducing its debt and improving loan terms.
Its share price slumped to less than 20p during the 2011 crisis but has risen to nearly 120p this year.
Fankhauser himself – wearing a deep blue velvet blazer, skinny jeans and grey suede desert boots, sipping espresso on a chilly day in Palma – doesn’t look like a man who would go on a package trip. One of his latest innovations is the Casa Cook brand of boutique hotels where ‘chic’ and ‘cool’ are the order of the day. These were designed with younger, hip, millennial customers in mind but ‘what we found is that families and older couples are cool too, and they want this type of hotel’.
He says that for the travel industry, Brexit presents a major problem. ‘We want movement in Europe to be as free as possible and we have been strong in expressing our opinion that hard Brexit is not an option,’ he says. The very idea of Brexit is alien to Fankhauser, who still finds it odd that he has to show his passport when flying to the Continent from the UK.
Peter Fankhauser earned £1.8m last year
A spate of terror attacks – at least 16 affected the firm this year alone – has posed a steady stream of operational headaches, with millions of holidays having to be rescheduled. Another challenge has been the rising number of fraudulent food poisoning claims by hotel guests, something Fankhauser has campaigned vigorously against after some operators reported claim numbers had rocketed by as much as 700 per cent.
Most recently, the firm had to act when 22,000 of its customers were caught up in Hurricane Irma in the Caribbean. Some people complained they had been shifted from a five-star to three-star resort in order to ensure their safety, and grumbled that the torrential rain had left water in their room.
Some might be surprised at this, but Fankhauser is sympathetic.
He took the top job just as the firm was found to have breached its duty of care to customers when two children died from carbon monoxide in one of its Corfu hotels. The Mail on Sunday revealed that the firm – under its previous boss Harriet Green – had pursued a vigorous legal action against the hotel and received a £3.5 million payout.
Changing the mindset of the business became Fankhauser’s mission. ‘The customer needs to be at the heart of everything we do. We can’t walk a mile in our guests’ shoes because they’re on holiday and they’re probably not wearing any, but we can try on their flip-flops,’ he laughs.
One myth he is keen to dispel is that Brits and Germans don’t get on when they are on holiday. Poolside arguments about reserving sunbeds are, he says, a fallacy – but the key is ‘getting the mix right’. He concedes that a hotel where 90 per cent of guests are German and 10 per cent British won’t work.
One of the main focuses for 2018 will be China, where he aims to increase business tenfold as more Chinese people can afford holidays. Football-related trips could be a major draw to the UK – there are six million Manchester United fans in China and Thomas Cook has the exclusive rights to sell the club’s tickets in that country. As well as trying to break into new markets, the firm is keen to revive old ones. As the number of physical stores has dwindled, so too has its foreign exchange business. Now Thomas Cook Money will not only offer holidaymakers their travel cash, it will have an app offering pay as you go travel insurance.
The bill arrives and it’s time to head off and check the progress of a new office, which will house Thomas Cook’s 380 Majorca-based staff. For someone whose career is about holidays, there doesn’t seem to be much time for relaxing.