Minimum Wage and Thomas Cook Group

The upheaval of the Arab Spring affected Thomas Cook massively. The Group had been battered by weak consumer confidence within the Middle East destinations, such as Egypt and Tunisia. Many holidaymakers cancelled their bookings to such destinations, which resulted in a decreased cash flow for Thomas Cook. 2. Air passenger duty increase – Holidaymakers will now have to pay even more for foreign holidays, due to a recent increase to air passenger duty.

Thomas Cook will have to pass on these increases to their customers, which could result in less bookings due to the impact for British families wanting to travel abroad. Page 7 – Economic Factors 1. Euro zone crisis – British holidaymakers were unfazed by the financial crisis in places like Greece. Business in Greece has returned back to normal relatively quick. Greek bars and restaurants have reduced the prices giving tourists good value for money. 2. Recession – Thomas Cook got into difficulty during the downturn in the travel sector.

In the last financial year Thomas Cook struggled with high debt and reported pre-tax losses. Thomas Cook cut 2,500 jobs within the UK and closed almost 200 stores as an attempt to revive its profitability. The redundancies equated to 16% of its UK workforce jobs in the UK. 3. Cost of living – Thomas Cook was hit hard by the recession. Due to the uncertainty of consumer spending Thomas Cook has had to cut the amount of holidays for UK customers. Page 8 – Technological Factors 1. Ease of purchasing holidays using the internet – Consumers today are using technology in all forms.

Thomas Cook were the first high street agent to sell holidays online, however this is being out shadowed by dynamic selling sites, such as Expedia and onthebeach. com. Thomas Cook are harnessing the power of technology to improve the customer experience, making it easier to select their destination, book, get more information, share photos and ask questions. 2. Online chat function – Thomas Cook became under fire from independent agents due to high call waiting times. Thomas Cook created the new live chat tool to allow agents to use as an alternative to calling.

This facility is effectively the link between online and face to face interaction. 3. Integrate all existing IT structures – Thomas Cook integrated the whole retail network onto one IT system. Employees are able to log on in any store nationwide without any problems. It also means customers are able to pay balances, print off tickets and invoices in any Thomas Cook store. Page 9 – Legal Factors 1. Competition Law – This stops businesses who compete in the same market from fixing prices, limiting the products that are on the market and dividing up customers.

Thomas Cook must always make independent decisions on how to compete in the market place and should never disclose any sensitive commercial information to any competitor. If any competition laws are broken, this can result in large fines for Thomas Cook and the world famous brand could be seriously damaged. 2. Health and safety – Thomas Cook pro actively work to reduce the number of minor accidents. An enhanced safety management system enables retail stores to access test reports online, making compliance easier.

There is also an employee awareness programme and e-learning packages to ensure every employee is made aware of any new changes and are kept up to date and compliant with the current legislation. 3. National minimum wage – Recent changes to the national minimum wage has resulted in Thomas Cook offering a nil pay award to its UK employees. Thomas Cook already pay above the minimum wage for most roles. The Group are also considering the withdrawal of staff concessions due to the governments damaging austerity. Page 10 – Environmental Factors 1.

Increase of Green Travel – more effort is needed from Thomas Cook to minimise their impact on the environment. Thomas Cook has joined ‘The Reduce my footprint’ initiative set up by ABTA. It offers advice and information on how the Group can reduce carbon emissions. There is also the opportunity to offset these carbon emissions through the Travel Foundation. Thomas Cook can choose to pay to offset their carbon footprint. 2. Waste management – production of waste management is a large cost factor for Thomas Cook. On all short and medium haul inbound flights paper, plastic and aluminium cans are recycled.

The majority of retail stores recycle their unwanted brochures and other recyclable products. The Group uses Vale Recycling Group, who operate throughout the UK, to collect all the unwanted brochures and confidential waste. 3. Online brochures – Thomas Cook has cut its brochure print by almost a quarter. The project has been done to help Thomas Cook save money through brochure printing and distribution. This has also had a significant environmental benefit in reducing waste. Page 11 & 12 – Organisational Structure

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