The Mediterranean's leading tourist hotspots were bracing Tuesday for a "tsunami" of losses, which could amount to hundreds of millions of euros, following the devastating collapse of British tour operator Thomas Cook.
Beyond the urgent need to repatriate hundreds of thousands of tourists, industry professionals were agonizing over the huge sum in unpaid bills.
The British package holiday giant had established a practice of paying a hotel's bills only 90 days after the departure of the guest, raising the question of the huge sums racked up over the busy summer period, several hotel sources said.
In Spain, where the company operated 55 hotels -- the highest number in any country -- the debt could reach as high as 200 million euros ($220 million), the Exceltur tourist association said.
And Italy's Confindustria Alberghi, one of the organisations representing the hotel industry, said the collapse of Thomas Cook could have a "very heavy" impact on the tourism sector.
Fellow industry body Federalberghi, which represents the sector, said many businesses would suffer "serious consequences".
"Within just a few hours, we have been contacted by many hotels telling us that the British tour operator owes them tens of thousands of euros, and sometimes hundreds of thousands," said its president Bernabo Bocca.
In Tunisia, the hotel federation said the collapse of Thomas Cook had left it with "65 to 70 million euros" in unpaid bills.
Even in Bulgaria, where the operator brought up to 400,000 visitors every year, hoteliers at Sunny Beach, the biggest resort on the Black Sea, said they were expecting to see "bankruptcies" and losses amounting to 36 million euros.
Legal action looms
Faced with huge financial losses, which several industry figures referred to as a "tsunami", Italy's Federalberghi said it had made contact with counterparts across Europe to coordinate legal action.
In Spain, Thomas Cook was the second biggest tour operator, bringing in 7.3 million tourists in 2018 -- around nine percent of the total visitors, according to an AFP calculation based on figures from national airport operator AENA.
In the Canary Islands, one in four holidaymakers were flown in by the package holiday specialist, the local hotel federation said.
And in Greece, where tourism accounts for 27 percent of GDP, Thomas Cook brought in 8.5 percent of the overall visitors last year, Greek press reports said, while in Tunisia, five percent of tourists came via the firm.
Most industry experts were extremely concerned about the fallout, with Crete facing a loss of up 100,000 reservations between now and November.
"The collapse of Thomas Cook is having a domino effect on suppliers, tourist buses, car hire companies, etc," said Michalis Vlatakis, who heads Crete's tourist agencies association.
"We need time to have a clearer picture of the damage that has been caused."
Individual businesses also had their own concerns.
"We'll have trouble next year.. especially (if we lose) customers that are German, Swedish and British because that's the wealthiest customers that we have," said Althea Scaramucci, who runs a juice bar in Majorca's capital Palma.
Carrier shortage in Canaries
In many countries, hoteliers have already turned to their respective governments for help, with Turkey -- where Thomas Cook accounts for some three percent of tourists -- mooting a package of support of up to 50 million euros.
In Greece and Spain, hotel industry representatives were on Tuesday holding urgent meetings with government representatives.
The impact on Spain's Canary islands could be even more devastating than elsewhere as the resort is very popular as a winter destination among tourists from northern Europe.
RyanAir is one of the few carriers that flies there but the budget airline is currently planning to close four of its bases in Spain, three of which are in the Canaries.
Efforts are now under way to convince Madrid to pressure RyanAir to keep these bases open, to ensure the accessibility of the resort in the longer term.
In Morocco, where Thomas Cook accounted for some 100,000 holidaymakers out of an overall total of 12 million, the outlook appeared less severe.
"The impact will be manageable," Lamia Boutaleb, the secretary of state for tourism, told AFP. - Daniel Silva with Emmanuelle Michel in Madrid and AFP bureaux in Europe
source: news.abs-cbn.com
LONDON - A British man named Thomas Cook said Monday he feared his dream wedding in Greece was ruined after the collapse of the holiday firm with the same name.
Cook, 29, is on the island of Rhodes with his partner Amelia Binch, 27, and their two children ahead of their planned wedding on Friday.
But they worry the ceremony may not go ahead while they wait to be repatriated, while some guests are still in Britain, the Nottingham Post newspaper reported.
"Thomas Cook promised us a surprise on our wedding because of my name but this was not the surprise we were expecting," he told the paper.
The couple, from the town of Hucknall near Nottingham in central England, said they had spent almost £10,000 (11,300 euros, $12,400) on a wedding package with Thomas Cook.
"I am just devastated. We have got 30 plus friends and family coming out, half are stuck at home in limbo. My best man is still in England. No one here knows anything," Cook said.
"I have been planning this for two years and it has all gone to pot. We have paid for everything. It is shattering. We don't know what we can do."
The travel group collapsed into bankruptcy on Monday, leaving around 600,000 holidaymakers stranded.
The British government is planning to bring home around 150,000 Britons stuck abroad, in the country's biggest repatriation since World War II.
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LONDON - Thomas Cook's 178-year existence was reported to be coming to an end on Monday after the British travel firm struggled to find private investment to keep it afloat, potentially affecting thousands of holidaymakers.
The operator has said it needs £200 million ($250 million) or else it will face administration, which could affect 600,000 holidaymakers and require Britain's largest peacetime repatriation.
A source close to the negotiations told AFP that the company had failed to find the cash from private investors and would collapse unless the government intervened.
But ministers are unlikely to step in due to worries about the pioneering operator's longer-term viability, the Times reported, leaving it on the brink.
The firm's creditors held a marathon meeting on Sunday to try and work out a deal, followed by a meeting of the board of directors.
The group issued a last-ditch plea to creditors to reduce the £200 million funding demand or restructure the debt, according to Sky News.
But it appears to have fallen on deaf ears, with the Financial Times reporting late Sunday that the efforts were unlikely to succeed and the Guardian saying it would go into administration in the early hours of Monday morning, with flights already being pulled from booking websites.
The Transport Salaried Staffs Association, which represents workers at the company, called on the government to save the firm.
"The company must be rescued no matter what," said TSSA General Secretary, Manuel Cortes.
Shadow business secretary Rebecca Long Bailey called on the government to step in by "taking an equity stake to avoid this crisis".
Foreign minister Dominic Raab promised that the 150,000 British tourists affected would not end up stuck abroad.
"I can reassure people that in the worst-case scenario, the contingency planning is there for people to avoid being stranded," he told BBC's Andrew Marr Show.
Two years ago, the collapse of Monarch Airlines prompted the British government to take emergency action to return 110,000 stranded passengers, costing taxpayers some £60 million on hiring planes.
The government at the time described it as Britain's "biggest-ever peacetime repatriation".
JOBS THREAT
But holidaymakers were already reporting problems, with guests at a hotel in Tunisia owed money by Thomas Cook being asked for extra money before being allowed to leave, according to a tourist interviewed by AFP.
"After an hour they left the hotel and are currently at the airport," said a spokesman for the Tunisian interior ministry.
The group's activities would cease immediately in the event of bankruptcy, forcing its travel agencies to close, grounding its planes and leaving the group's 22,000 global employees -- 9,000 of whom are in Britain -- out of a job.
Chinese peer Fosun, which was already the biggest shareholder in Thomas Cook, agreed last month to inject £450 million into the business as part of an initial £900 million rescue package.
In return, the Hong Kong-listed conglomerate acquired a 75 percent stake in Thomas Cook's tour operating division and 25 percent of its airline unit.
Thomas Cook in May revealed that first-half losses widened on a major write-down, caused in part by Brexit uncertainty that delayed summer holiday bookings. The group, which has around 600 stores across the UK, has also come under pressure from fierce online competition.
Cabinet maker Thomas Cook created the travel firm in 1841 to carry temperance supporters by train between British cities.
It soon began arranging foreign trips, being the first operator to take British travelers on escorted visits to Europe in 1855, to the United States in 1866 and on a round-the-world trips in 1872.
The company was also a pioneer in introducing "circular note" -- products that would later become traveler's checks.
It now has annual sales of £9 billion, serving 19 million customers in 16 countries.
source: news.abs-cbn.com
LONDON - British travel operator Thomas Cook Group said on Wednesday it had agreed to the main terms of a rescue package that will see Hong Kong's Fosun Tourism take over its tour operations and creditor banks and bondholders acquire its airline.
The world's oldest travel company, and pioneer of the package tour, has struggled with intense competition in popular destinations, high debt levels and an unusually hot summer in 2018 which reduced its last-minute bookings.
The debt burden meant the company had to sell 3 million holidays a year just to pay the interest, it said last month.
Thomas Cook also said in July that it was working to secure new investment from shareholder Fosun Tourism which would see the Hong Kong group take control of the business, along with its lenders whose debt would be converted into equity.
The terms announced on Wednesday will see Fosun - whose Chinese parent owns all-inclusive holiday firm Club Med - contribute 450 million pounds ($552 million) of new money in return for at least 75% of the tour operator business and 25% of the group's airline.
Thomas Cook's lending banks and bondholders will stump up a further 450 million pounds and convert their existing debt to equity, giving them in total about 75% of the airline and up to 25% in the tour operator business, the group said.
The recapitalization plan, which is subject to a legally binding agreement between the parties, will result in a significant dilution in existing Thomas Cook shareholders' interests, the company said, but it had decided it was the best way to secure the future of the group for all its stakeholders.
Shares in Thomas Cook, which were trading at 150 pence in May 2018, fell 15% to just under 6 pence in early deals on Wednesday.
AJ Bell investment director Russ Mould said shareholders in the troubled travel company may have to accept that their investment could be worthless.
"Investors are simply trying to cash out and crystallize any value left in their investment before the refinancing, for fear there could be nothing left if they wait," he said.
Earlier this year, Thomas Cook said it was exploring a sale of its airline business, which consists of German carrier Condor and UK, Spanish and Scandinavian operations, but a further profit warning in May left management seeking a more radical solution to save the business.
Fosun Tourism's parent Fosun International was co-founded by billionaire Guo Guangchang and is one of China's biggest conglomerates. It has spent billions of dollars over the past decade on healthcare, tourism and fashion companies in the United States and Europe.
As well as Club Med, Fosun International also owns English Premier League soccer team Wolverhampton Wanderers FC.
Fosun said earlier this year it would adopt an asset-light strategy and run Club Med resorts it plans to launch in China and other countries under management contracts.
($1 = 0.8145 pounds) (Editing by Kate Holton and Susan Fenton)
source: news.abs-cbn.com
