Thomas Cook Shuts Down As Travel Habits Change

With a $2.1 billion debt pile that fettered its response to nimble online competitors, U.K. travel firm Thomas Cook has collapsed and left 600,000 people stranded overseas. The company reportedly had to sell three million holidays per year to make its interest payments, CNBC reported.

According to The Guardian, the collapse is “is not because the British have stopped taking holidays.” It was noted, though, that city breaks have very much outstripped beach vacations. Those that benefit are easyJet, Airbnb and Ryanair, while those that stand to lose are package holiday firms, per the report.

And as the Thomas Cook aimed to market itself to a new generation of travelers, the company faced the impact of the coup attempt in Turkey in 2016, which has been described as one of its top destinations. It was also hit by the Europe-wide heatwave last year that discouraged travelers from traveling overseas.

The liquidation marks the close of a U.K. firm that began in 1841 with rail excursions that morphed into a company that pioneered the family package vacation in America, Europe, the Middle East and Africa. With the operation of resorts, airlines and hotels for 19 million people yearly, the company has left approximately 600,000 people overseas who will need government and insurance firm assistance to come home.

The company’s demise reportedly caused alarms at hotels. Some travelers have reportedly been asked to pay their bills for a second time out of pocket by owners of resorts.

The news comes after it was reported last week that Thomas Cook needed to find 200 million pounds for lenders or it could collapse.  At the time, it was reported that if the company did go under, it would possibly strand vacationers all across Europe. The company’s workers were also reported to be in jeopardy. (They number around 21,000 per past reports.)

“Discussions to agree final terms on the recapitalization and reorganization of the company are continuing between the company and a range of stakeholders,” Thomas Cook said per earlier reports. “These discussions include a recent request for a seasonal standby facility of 200 million pounds, on top of the previously announced 900 million pounds injection of new capital.”