Thomas Cook has prioritised cost cuts over customers and still needs to address safety issues nine years after two children died from carbon monoxide poisoning at a hotel booked through the travel company, according to a report.
Bobby and Christi Shepherd, aged six and seven, died in 2006 as a result of a faulty boiler at a bungalow attached to the Louis Corcyra Beach hotel on Corfu.
Thomas Cook was slow to respond to their deaths and was insensitive in its dealings with their parents, Justin King, the former boss of Sainsbury’s, said in his report commissioned by Thomas Cook and published on Monday.
Financial considerations have been more important to the company than treating customers well, including ensuring their safety, King said.
King said he had not found specific examples of cost concerns overriding safety but he painted a picture of a company that put its own interests ahead of customers after coming close to collapse in 2012, and that failed to learn the lessons of Bobby and Christi’s deaths.
Presenting his report, King said: “This is a business that has been through tremendous financial pressures and an almost existential threat a couple of years ago and has sought to achieve a balance that has put the existence of the business ... ahead of doing the right thing for customers. The financial parts of the business have been the powerhouse and the customer voice has not been strong enough.”
The report said Thomas Cook must spend much more on health and safety to improve training for staff and fund more checking at resorts.
King’s other recommendations include:
- Launching an improved whistleblower hotline so that staff at resorts can report problems, anonymously if they wish
- Providing customers with information and advice about carbon monoxide risks
- Selling customers low-cost carbon monoxide monitors for use on holiday
- Spending on systems so that customer complaints are used as an early warning about problems at a resort
- Advice for customers on general risks while on holiday, such as pool safety, and risks specific to a country
- Rewarding staff for solving customers’ problems instead of fending off complaints
Thomas Cook said parts of King’s report were uncomfortable reading and it would act on his recommendations. It is holding a carbon monoxide conference on 16 November and has donated £1m to set up a safer tourism foundation.
In May, an inquest reached a verdict of unlawful killing into Bobby and Christi’s deaths and said Thomas Cook had breached its duty of care. The jury decided that the hotel misled Thomas Cook about its gas supply and that the holiday firm’s health and safety audit of the complex was inadequate.
King criticised Thomas Cook for its abrupt and late replies to contact from Sharon Wood and Neil Shepherd, Bobby and Christi’s parents and for ignoring Shepherd’s attempt to arrange a meeting in 2013. When the company contacted the family, its approaches were “intermittent, sometimes ill-timed and often ill-judged”, King said.
“Having been an observer of the particular process around the coroner’s inquest, I was staggered by the position at that time that the company was seeking to defend itself in a very legalistic way,” King said. Thomas Cook failed to balance legal considerations with the need to behave in a humane way towards a grieving family, he said.
He praised the “extraordinary” campaign by Shepherd and Wood and said the section of his report on their treatment by Thomas Cook would be the most shocking to readers.
Wood and Shepherd said: “We welcome Justin King’s report and Thomas Cook’s new proactive approach in addressing the mistakes they made that led to the deaths of Christi and Bobby. It is a move in the right direction and the next step in what has been a long, hard fight for justice.
“Our hope is that we can bring about change that will dramatically reduce the number of deaths and injuries from carbon monoxide, both in the UK and abroad. We feel optimistic for the future but continue to call for all tour operators to put the health and wellbeing of their customers at the heart of their industry.”
Thomas Cook’s chief executive, Peter Fankhauser, met Shepherd and Wood in May after taking personal responsibility for the handling of the children’s deaths. He did so after it emerged Thomas Cook was paid £1.5m in compensation by the Corfu hotel. It donated the money to Unicef, the children’s charity, after the payment was revealed.
King interviewed current and past employees of Thomas Cook, including Manny Fontenla-Novoa, who ran the company when the children died, and Harriet Green, chief executive from July 2012 until Fankhauser took over last November. Green agreed in May to donate a third of a £10.5m share payout to charity following the inquest verdict.
The travel company has increased its health and safety efforts in the past two years but “significant shortcomings” remain, King said. Customers can be made safer by giving health, safety and risk operations more money and clout, he added.
The health and safety department has improved but is very stretched, and other parts of the business do not take enough responsibility, the report says. Thomas Cook has only kept pace with progress elsewhere in the travel industry, which is behind the times in its treatment of customers, King said.
Thomas Cook said immediate actions would include more staff on location to solve problems, more spending on better audits at popular resorts, and customer satisfaction as part of senior managers’ bonus reviews.
Fankhauser said: “It took us nine years to correct the mistakes of the past and to do what everyone would have expected of us. My priority is to drive this reorganisation as quickly and effectively as possible. It costs what it costs.”
