Holiday firm Thomas Cook has defended a payout it received from a Corfu hotel where two children died in 2006. As Ivor Bennett reports it underscores the reputational risk for companies trying to recover costs following a crisis.
A tranquil setting, tainted with tragedy. The sea-front villa in Corfu where two British children died of carbon monoxide poisoning in 2006. Nearly a decade on, the ramifications are still being felt. Travel company Thomas Cook firmly in the firing line. SOUNDBITE (English) SHARON WOODS, MOTHER, SAYING: "Thomas Cook put Christi and Bobbi in that bungalow and I will always hold Thomas cook responsible for their deaths." Sharon Woods was speaking after an inquest into her children's deaths last week. where a jury found Thomas Cook breached its duty of care. Christi and Bobbi died as a result of a faulty boiler at the hotel booked by the company. The parents say they never received an apology, despite the company insisting it sent one. The start of a PR disaster with potentially far-reaching consequences, says Brand Finance's Robert Haigh. SOUNDBITE (English) ROBERT HAIGH, COMMUNICATIONS DIRECTOR, BRAND FINANCE, SAYING: "The impact will definitely be most pronounced this year. It's probable that over the coming years their reputation will recover just through the passage of time. But there are things that Thomas Cook could do, and could've have done better, that would've rapidly accelerated the recovery of their brand." Three hotel employees were jailed by a Greek court in 2010. A criminal trial that cleared Thomas Cook of any wrong doing. It's now emerged Thomas Cook claimed compensation from the hotel's owners after the trial. A reported 3.5 million pounds - ten times the amount received by the parents - sparking a wave of negative publicity. The firm's defended the payout, claiming the costs incurred far exceed it. ; But when it comes to reputational risk, it may be fighting a losing battle. SOUNDBITE (English) ROBERT HAIGH, COMMUNICATIONS DIRECTOR, BRAND FINANCE, SAYING: "They stand to lose a lot more through the impact on their brand than they do potentially through the cost of the damage in the short-term to their bookings and the legal cost of the trial. So really they should be looking longer term at this and really looking at the impact on their reputation and their brand." It seems they may have realised that too. Thomas Cook's now donating 1.5 million pounds of its compensation to the children's charity Unicef.