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

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?

Published: 2 October 2019 10:01 CEST
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 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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TRAVEL NEWS

Why are fewer British tourists visiting Spain this year?

Almost 800,000 fewer UK holidaymakers have visited Spain in 2023 when compared to 2019. What’s behind this big drop?

Published: 23 August 2023 11:36 CEST
Updated: 26 August 2023 18:32 CEST
Why are fewer British tourists visiting Spain this year?

Spain welcomed 12.2 million UK tourists between January and July 2023, 6 percent less when compared to the same period in 2019, according to data released on Monday by Spanish tourism association Turespaña.

This represents a decrease of 793,260 British holidaymakers for Spain so far this year.

Conversely, the number of Italian (+8 percent), Irish (+15.3 percent), Portuguese (+24.8 percent), Dutch (+4 percent) and French tourists (+5 percent) visiting España in 2023 are all above the rates in 2019, the last pre-pandemic year. 

German holidaymakers are together with their British counterparts the two main nationalities showing less interest in coming to Spanish shores.

Britons still represent the biggest tourist group that comes to Spain, but it’s undergoing a slump, with another recent study by Caixabank Research suggesting numbers fell particularly in June 2023 (-12.5 percent of the usual rate). 

READ ALSO: Spain fully booked for summer despite most expensive holiday prices ever

So are some Britons falling out of love with Spain? Are there clear reasons why a holiday on the Spanish coast is on fewer British holiday itineraries?

According to Caixabank Research’s report, the main reasons are “the poor macroeconomic performance of the United Kingdom, the sharp rise in rates and the weakness of the pound”.

This is evidenced in the results of a survey by British market research company Savanta, which found that one in six Britons are not going on a summer holiday this year due to the UK’s cost-of-living crisis.

Practically everything, everywhere has become more expensive, and that includes holidays in Spain: hotel stays are up 44 percent, eating out is 13 percent pricier, and flights are 40 percent more on average. 

READ ALSO: How much more expensive is it to holiday in Spain this summer?

Caixabank stressed that another reason for the drop in British holidaymakers heading to Spain is that those who can afford a holiday abroad are choosing “more competitive markets” such as Turkey, Greece and Portugal. 

And there’s no doubt that the insufferably hot summer that Spain is having, with four heatwaves so far, has also dissuaded many holidaymakers from Blighty from overcooking in the Spanish sun. 

With headlines such as “This area of Spain could become too hot for tourists” or “tourists say it’s too hot to see any sights” featuring in the UK press, budding British holidaymakers are all too aware of the suffocating weather conditions Spain and other Mediterranean countries are enduring. 

Other UK outlets have urged travellers to try out the cooler Spanish north rather than the usual piping hot Costa Blanca and Costa del Sol destinations.

Another UK poll by InsureandGo found that 71 percent of the 2,000+ British respondents thought that parts of Europe such as Spain, Greece and Turkey will be too hot to visit over summer by 2027.

There’s further concern that the introduction in 2024 of the new (and delayed) ETIAS visa for non-EU visitors, which of course now also applies to UK nationals, could further compel British tourists to choose countries to holiday in rather than Spain.

READ MORE: Will British tourists need to pay for a visa waiver to enter Spain?

However, a drop in the number of British holidaymakers may not be all that bad for Spain, even though they did spend over €17 billion on their Spanish vacations in 2022. 

Towns, cities and islands across the country have been grappling with the problem of overtourism and the consequences it has on everything from quality of life for locals to rent prices. 

READ ALSO: ‘Beach closed’ – Fake signs put up in Spain’s Mallorca to dissuade tourists

The overcrowded nature of Spain’s beaches and most beautiful holiday hotspots appears to be one of the reasons why Germans are visiting Spain in far fewer numbers. A recent report in the country’s most read magazine Stern asked “if the dream is over” in their beloved Mallorca.

Spanish authorities are also seeking to overhaul the cheaper holiday package-driven model that dominates many resorts, which includes moving away from the boozy antics of young British and other European revellers.

Fewer tourists who spend more are what Spain is theoretically now looking for, and the rise in American, Japanese and European tourists other than Brits signify less of a dependence on the British market, one which tends to maintain the country’s tourism status quo for better or for worse.

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