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

Thomas Cook collapse: Which holiday hotspots in Spain will suffer the most?
At the Thomas Cook headquarters in Palma, Mallorca, 750 people lost their jobs overnight. Photo: AFP
Tourism chiefs in Spain have warned of the devastating losses facing hotels and holiday related companies as a consequence of the collapse of Thomas Cook. But where in Spain will suffer the most?

Tourism means a great deal to Spain.

Last year Spain set a new tourism record with 82.6 million foreign visitors to its shores and the sector contributes some 11.9 percent of GDP according to Exceltur data from 2018, representing sales of €142 billion.

Thomas Cook holidaymakers formed a significant part of the package holiday market, bringing around 3.6million visitors to Spain last year,  mostly to the Balearic Islands and the Canary Islands, representing a sector of the tourism market worth 2.6 billion to Spain. 

The Canary Islands


Map: Furian/ Depositimages

Tourism accounts for a whopping 40 percent of GDP across the Canary Islands as a whole and Thomas Cook holidays represent a significant chunk of that.

The president of the Canary Islands, Ángel Víctor Torres said that the collapse of the British holiday company represented “a huge blow to the economy” and said emergency measures would be brought in to try and compensate for the losses.

The Canaries are particularly vulnerable because the collapse came as the islands gear up for the start of their busy tourism season when holidaymakers are attracted to the destination for the winter sun.

One in four foreign holidaymakers were brought to the Canary Islands by the Thomas Cook last year, according to hotel association ASHOTEL and the hotel federation FEHT.

According to the latest data available from the Canary Institute of Statistics (Istac) during the second quarter of 2019, a total of 143,963 people were employed within the tourism sector.

“It is very important that we manage to fill the important gap left by Thomas Cook with other airlines and tour operators,” insisted Jorge Marichal, the president of ASHOTEL, which urged the Spanish government to pressurize Ryanair into changing its decision to close operations in the Canary Islands

At a meeting planned for October woth the regional government of the archipelago will present “a set of important measures that we have been working with the Government of Spain,” according to President Torres, that will include suspending tourism tax for the short term and temporarily postpone their social security contributions as a way of protecting jobs.

The Balearic Islands

The Balearic Islands are also reeling from the collapse of Thomas Cook which brought 1.24 million of 16 million tourists who visited the island last year.

In a statement on Monday, Yago Negueruela, Minister of Labor and Tourism of the Balearic Islands, said: “The bankruptcy of Thomas Cook is one of the biggest crises in the tourism industry in the Balearic Islands.”

When the holiday company collapsed last week it left an estimated 43,500 holidaymakers stranded. Of those 35,000 were in Mallorca, 5,000 in Ibiza and another 3,500 in Menorca, according to official sources.

But the impact of the bankruptcy goes far beyond those who were directly affected.

The Balearic Island tourism authority estimated that October would see hotels miss out on 25,000 tourists due to arrive on Thomas Cook holidays.

Reports on the island said that some hotels, those that exclusively accommodated Thomas Cook holidaymakers, would close their doors when the last of the current guests checked out.

The Thomas Cook headquarters for operations in Spain was based in the Balearic islands’ capital Palma which meant that overnight 750 employees lost their job as well as all those employed by Thomas Cook Airlines Balearic, an airline that exclusively flew from destinations across Europe to the Balearics.

Not only did the company have its own hotels on the islands, it also managed more than a dozen in Mallorca alone, and used dozens of third party establishments to book accommodation.

As Thomas Cook took 90 days to pay for bookings, many establishments have unpaid bills dating back to July with Mallorca’s Hotel Business Federation of Mallorca estimating that the total debt owed by Thomas Cook to hotels on the island clocking upwards of €100 million.

The first hotels to shut up shop will be the Thomas Cook operated establishments, which include the Cook Club Palma Beach, a resort hotel in Mallorca aimed at the millennial crowd  as well as  Casa Cook Ibiza, the first of the Casa Cook brand of adult-only luxury resorts which was opened in Ibiza earlier this year with another under construction in Mallorca.

Hotels across Spain face closure

Also facing immediate closure are those hotels that were franchised Thomas Cook brands.

These include 18 establishments in the Sentido hotel chain, ten in Mallorca, five in the Canary Islands and three in Andalusia, four Sunconnect hotels (In Menirca, Almería, Lanzarote and Fuerteventura, and 17 Smartline hotels; seven in Mallorca, two in Menorca, three in Lanzarote, two in Fuerteventura, one in Tenerife, one in Malaga and one in Ibiza

But hundreds more hotels beyond the Thomas Cook brand are also facing closure.

“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.

Benidorm and the Costa Blanca 


Photo: AFP
 

The Costa Blanca on Spain's south eastern coast is also likely to be hugely affected by the fall of Thomas Cook, which brought an estimated 16,000 of the 5 million annual holidaymakers to its resorts.

Local reports indicate that some hotels are already in strife, demanding payment from guests who had already paid up front with Thomas Cook holidays or threatening to turf them out onto the street. 

Although Thomas Cook doesn't have any branded hotels on this stretch of coast, some hotels, especially in Benidorm and Calpe relied on Thomas Cook guests especially during the winter months when many retired people would come to escape the cold of northern Europe. 

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