Thomas Cook was a famous travel company that collapsed in 2019. Its founder’s memory will outlive it.
Cook rose from a humble background in Melbourne, a sleepy market town in England. He left school at age 10 and found work in a factory. His wages were just a penny a day.
In his twenties, Cook became a Baptist preacher. His grit was soon apparent. The young man used to walk up to 20 miles (32 km) a day. He used to work by moonlight to save candles.
British society then faced the scourge of alcoholism. Alcohol consumption was three times today’s level. Drunkenness was so common that workers were often absent. Child abuse and poverty were rife due to alcoholism. Hence, Cook preached temperance, a philosophy that sought to eliminate liquor.
In 1841, Cook started the company that bears his name. Cook was driven more by religious conviction than money. He arranged for a train to take 500 people from his church from Leicester to Loughborough for a temperance meeting. The passengers got round-trip travel, entertainment and food for one shilling (which is GBP20 or $37 in today’s money).
The Loughborough excursion may seem common today. But it was one of the very first package tours. It provided travel that was affordable to the masses. The tour packages that have brought tourists from Shanghai to Singapore (before Covid) trace their origins to Cook’s Loughborough trip.
In the 1840s, most people in the West had not ventured outside their hometown. Travel was then the preserve of the rich. It was similar to space travel being restricted to people with Jeff Bezos’ means. It took months to arrange hotels in another town, let alone another country.
Cook sensed an opportunity to democratise travel. He adopted the package tour concept to overseas travel. British could travel on package arranged by his company to Europe. They could visit the Coliseum in Rome and the Eiffel Tower in Paris.
Thomas Cook, as a company, built a global network of tour packages. Up to the early 2000s, it was one of the world’s dominant travel companies. Many of Thomas Cook’s 19th-century innovations were still driving the company. These included travel vouchers, traveller’s cheques and printed guidebooks. Eventually, online travel platforms like Expedia drove Thomas Cook to its knees in September 2019.
Traveloka, an online travel platform that seeks to popularise travel in Southeast Asia, has a similar chance as Thomas Cook had back in 1841. In Indonesia, its largest market, most people have not travelled beyond 100 miles (160 km) outside their hometown. Only a tenth of the population have been on a plane.
Ferry Unardi, Traveloka’s 33-year-old founder, is from Padang, a town in Sumatra, Indonesia. Unardi was studying at Harvard Business School in 2013. He had trouble booking his travel from Boston to Padang. Finding a 20-hour flight to Jakarta was not the problem. But booking a two-hour flight from the Indonesian town was impossible.
Unardi sensed an opportunity. There was a need for a common platform to book domestic air travel online. Like Bill Gates and Mark Zuckerberg, he dropped out of Harvard and founded a company.
Traveloka would use technology to help ordinary people travel. Initially, it started with domestic air travel in Indonesia. It is a vast country with 17,000 islands and four time zones.
Before Covid wiped out travel, Traveloka had expanded to six countries in Asean. Over 100 airlines were partnering it. It had branched out to hotels and entertainment. The start-up had 2,000 employees and was threatening Expedia, the dominant online platform.
Covid brought travel to a standstill. Traveloka’s revenue was decimated along with the rest of the industry.
However, it showed Thomas Cook-like resilience. It raised US$250 million ($336.5 million) in equity in the middle of the pandemic. This added to the US$950 million that was provided in several rounds of funding. The early investors include GIC.
There are now green shoots of recovery for travel. Travel in Vietnam is close to preCovid levels. With the recovery in the West, Traveloka is looking beyond the pandemic. Bloomberg has reported that Traveloka is considering a SPAC listing in the US.
Covid may continue to batter travel. But Traveloka’s investors can take solace in Cook’s journey. He became rich by bringing travel to the doorstep of ordinary people.
Nirgunan Tiruchelvam is the head of consumer sector equity at Tellimer and the author of Investing in the Covid Era. He does not hold any position in the stocks mentioned in this column.
Photo of Thomas Cook: Wikipedia