Thomas Cook Failure: the Destination Impact
The collapse of Thomas Cook and its impact on UK outbound customers has had a great deal of coverage. Less attention had been paid to the impact in destinations. There were 600,000 stranded holidaymakers and hundreds of thousands had their holidays cancelled. Upsetting but those abroad were repatriated and all those covered by ATOL or their credit cards got their money back.
For many destinations, the collapse of Thomas Cook created an existential threat.
In 2018 the UK accounted for close 30,436, in the first 6 months of 2019, there were 28,772. It is fair to say that The Gambia was growing in popularity in the UK market. 23% of all arrivals this year. In 2018 the UK accounted for 29% of arrivals so The Gambia was beginning to diversify its source markets.
For the winter season, 2019/20 advance booking from the UK on Thomas Cook totalled 28,000. between seven and nine flights per week. Half travelling on packages, half flight only. The Gambia had advance bookings from Scandinavia of 17,000 on two flights per week.
Thomas Cook accounted for 30% of arrivals over a calendar year and 40% over the winter months. In the second half of 2019. The Gambia expects to lose $26.8m (arrival fees and discretionary spend).
The Gambia is looking to work with existing and new airlines and operators to increase arrivals this winter and in future years.
The Spanish Confederation of Hotels and Tourist Accommodation reports that some 1.3 million autumn and winter visitors will be unable to fly Spain. As those trying to rebook their holidays have discovered it is the cost of flights that is the problem, there is plenty of reasonably priced accommodation available.
The Spanish Confederation of Hotels and Tourist Accommodation anticipated that 500 hotels are at risk of closure, despite €300m of intervention by the Spanish government.
Majorca’s beaches were left deserted, and British-run businesses facing collapse. more
The government predicts that 400,000 Thoams Cook holidaymakers won’t make it to the archipelago this winter. The Fuerteventura Princess had an exclusive deal with Thomas Cook for 95% of its 688 rooms up to 2023. 160 staff are to be laid off. Estimates suggest that at least another 3,400 will be laid off.
Turkey had 40 m tourist arrivals in 2018. Turkey’s Hoteliers Federation (TUROFED) has warned that the country could miss out on up to 700,000 tourists a year. The chairman of TUROFED, Osman Ayik, told Reuters: “There are a large number of small businesses whose fates depend on Thomas Cook, especially in Mugla, Dalaman and Fethiye.” He added some small hotels in Turkey are still owed around £100,000 – £200,000 ($125,000-$250,000).more
Time for a rethink?
Rafael Gallego, president of Spain’s CEAV travel agency association, is reported to have told El Mundo. that the Thomas Cook debacle reveals the fact that fewer travellers sign up to a package based “merely on a destination’s climate or vibes….. People travelling today don’t go so much to a place, but rather to do something specific,” more
The company’s debts had reached £1.4bn by 2018. Peter Fankhauser, told MPs “Since 2012 we paid £1.2bn of interest costs and refinancing costs. Imagine if we had only half of that reinvested in the business, we could have been faster“. The MPs pursued the directors and auditors over the reasons for the debt and directors bonuses. more