500 hotels in Spain face immediate closure after Thomas Cook collapse

Hundreds of hotels in Spain are facing imminent closure over the collapse of British travel giant Thomas Cook, the head of the Spanish hotel federation warned on Monday.

500 hotels in Spain face immediate closure after Thomas Cook collapse
Photo: AFP

“There are 500 hotels which are going to close immediately due to the collapse of Thomas Cook and the situation could get worse if the government doesn't take immediate action,” Juan Molas, head of Spain's Confederation of Hotels and Tourist Accommodation, told business daily Cinco Dias.

And the sum in unpaid bills left by the demise of the tour operator would be much higher than the initial estimate of 200 million euros ($220 million), said Molas, whose organisation represents 15,000 businesses.

“It will be much more. The amount for only eight chains is close to 100 million.”

READ ALSO:  Thomas Cook collapse: Which holiday hotspots in Spain will suffer the most?

Of those hotels facing immediate closure, 100 were exclusively dependent on Thomas Cook, he said, while the rest counted on the firm for between 30 and 70 percent of their clients.

One hotel in Fuerteventura, the second largest of the Canary Islands, had recently undergone a 20-million-euro upgrade and was now faced with 700 rooms “which are going to be empty from October 7” and 200 employees it would be forced to dismiss.

Worst hit are those in the Canaries and the Balearic Islands, where 40 percent of hotels are affected.

The industry has put together an emergency plan to be presented to Tourism Minister Reyes Maroto at the next Spanish tourism board meeting on October 7th which will also address the urgent question of air links with the Canary Islands.

Industry experts fear the impact there could be even more devastating than elsewhere as the resort is very popular as a winter destination among tourists from northern Europe.

“The busy season is starting and Thomas Cook had 30 percent of air capacity,” Molas said, indicating the disappearance of the package holidaymaker could affect some 1.3 million airline seats, with Tenerife and Lanzarote particularly badly hit.   

He urged the government to contact RyanAir, one of the few carriers that flies there, to urge the budget airline “to reconsider” plans to close four bases in Spain, three of them in the Canaries, saying it was “critical” that the airline maintain its flights.



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Thomas Cook collapse: Spain introduces emergency measures to soften the blow

The Spanish government said on Thursday it would pump hundreds of millions of euros into the country's tourism sector to help it deal with the fallout from travel giant Thomas Cook's bankruptcy.

Thomas Cook collapse: Spain introduces emergency measures to soften the blow
Photo: AFP

The move comes days after the Spanish hotel federation warned that hundreds of hotels faced imminent closure over the collapse of the British tour operator “if the government doesn't take immediate action”.   

At a news conference, Reyes Maroto, the minister for tourism, said that Madrid would inject €300 million ($330 million) to “deal with the urgency of Thomas Cook's failure”.

The money is to go mostly to the Canary Islands and the Balearic Islands, which are among Thomas Cook's prime destinations.   

READ MORE: Thomas Cook collapse: Which holiday hotspots in Spain will suffer the most?

Some 400,000 tourists booked for travel this winter to the Canary Islands and 300,000 booked to the Balearic Islands “are not coming because of the bankruptcy”, Maroto said.

Up to two thirds of the total funds are to go towards loans to tourism companies to make up for the shortfall from bills now left unpaid by Thomas Cook.

There are also plans to lower air travel taxes to encourage airlines to rapidly fill the gap left by the British company as the Spanish holiday islands are hugely dependent on air travel.

Other measures include a tax holiday for tourism workers, help with tourism marketing efforts, and legal assistance for companies hit.   

Maroto did not say whether there were any plans to sue Thomas Cook in British courts.

Thomas Cook was Spain's second biggest tour operator, flying more than seven million visitors to the country in 2018, the minister said.