Pain in Spain: Thomas Cook demise prompts 500 hotels to close
Thomas Cook’s bankruptcy has had serious knock-on effects on the world of hospitality. (Photo by Hans from Pixabay)
Prominent UK travel company Thomas Cook folds, wreaking havoc on some parts of Spain’s hospitality industry.
Thomas Cook, the historic UK travel operator, has filed for bankruptcy after a long period of financial decline.
The British tour operator’s collapse has sent shockwaves through some of the world’s most buoyant tourist regions, including Spain, where a swathe of hotels has had to close suddenly in its wake.
We find out more.
500 Spanish hotels close their doors
In a huge blow to Spain’s hotel industry, 500 properties have had to immediately cease operations in the wake of Thomas Cook’s bankruptcy.
One fifth of this number depended exclusively on tourism that came through the renowned British tour operator, while the remaining 400 had between 30 and 70% dependency on Thomas Cook.
The Spanish Confederation of Hotels and Tourist Accommodations (CEHAT) announced the immediate closure of all 500 hotels in the aftermath of the company’s liquidation, with the confederation’s president Juan Molas saying that the situation may escalate “if the Executive does not take action immediately.”
The most affected regions are the Canary Islands, the Balearic Islands, Costa del Sol, Catalonia and Valencia.
Crisis plan and damage limitation
Reports estimate that the initial debt incurred due to the closure of Thomas Cook is around €200m, with projections that this number will increase as the full scale of the crisis becomes apparent.
As a reaction to this, local hoteliers will attend the Spanish Tourism Council to present a crash plan to the tourism minister. The plan’s focus will be to initiate alternative flight arrangements to the Spanish islands, given the fact that Thomas Cook operated flights that brought 30% of guests to these areas.
Spanish hospitality industry professionals and lobbyists will also reach out to Ryanair to implore the low-cost carrier to use bases in the Canary Islands from the beginning of 2020. Reduction in aerospace fees will also be floated as an incentive to reboot Spain as a destination for airlines.
Other measures to safeguard the industry and its workers include increased social security contributions and postponed VAT payments to neighbouring countries such as Portugal.
Tenerife and Lanzarote look set to lose out most heavily from the departure of Thomas Cook from their operations, so these regions will be the focus of much of the recompense the Spanish tourism industry will seek to encourage.