Things had been looking up for the Blue Palace Hotel on Turkey’s southern coast. The 64-room residence near the resort town of Marmaris had enjoyed a rebound in visitor numbers after a difficult period marred by terror attacks and a 2016 attempted coup.

Now, managers are braced for tens of thousands of pounds worth of losses after the collapse of Thomas Cook. The UK tour operator always paid in arrears — and its last payment was for the month of June. “They didn’t pay for the peak season,” said manager Yenal Cakici. “We are worried about the people who work at Thomas Cook . . . but of course we also have to think about our invoices.”

Hotel owners across the world are facing the same predicament after the demise of the 178-year old travel group, which went into liquidation in the early hours of Monday. The firm offered trips as far away as Cuba and Mexico, but the vast majority of the holidays it sold were to the resorts that line the Mediterranean. In Greece, Spain and Turkey — Thomas Cook’s most popular summer destinations — the bankruptcy threatens to strike a devastating blow to communities that are economically reliant on package tourism.

Foreign visitors are so vital to the Canary Islands that one town — Maspalomas in Gran Canaria — has avenues named after tour operators such as Tui and Kuoni and Thomas Cook’s German subsidiary Neckermann. Thomas Cook organised around 3.6m trips in and out of the Atlantic archipelago last year.

Tourists leave the Thomas Cook's "Cook's Club" hotel in Hersonissos, on the island of Crete on September 24, 2019. - British travel group Thomas Cook declared bankruptcy on September 23, 2019 after failing to reach a last-ditch rescue deal, triggering the UK's biggest repatriation since World War II to bring back stranded passengers. Grigoris Tassios, head of the Hellenic Chamber of Hotels, said in comments to state broadcaster ERT TV that the impact would be felt by Greek hotels who would end up making a loss as a result, and that the option of legal action would be explored in order for hotels to recoup their losses from Thomas Cook. (Photo by Costas Metaxakis / AFP)COSTAS METAXAKIS/AFP/Getty Images
Thomas Cook’s ‘Cook’s Club’ hotel in Hersonissos on the island of Crete © AFP/Getty

Tom Smulders, vice-president of the Canaries’ hotel federation, said the Thomas Cook group, including its German and Nordic affiliates, accounted for around 25 per cent of his sector’s receipts. He still held out hope such subsidiaries could be rescued: “These are healthy companies which are part of the bigger family; there’s no point slaughtering them without any reason,” he said.

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The UGT, an umbrella Spanish trade union, has estimated that more than 10 per cent of the 130,000 workers involved in the local hospitality industry could be affected by the tour operator’s collapse.

Grigoris Tasios, head of Greece’s PanHellenic Federation of Hoteliers, believes that losses to his country’s hotel owners could amount to €300m, including €80m-€100m in Crete, Greece’s most popular destination for package holidays.

Manolis Tsakalakis, a hotelier in the island’s Rethymnon district and president of a local owners’ association, said Cretan hotel owners had not received any payments from the company since mid-July. “Thomas Cook is one of the biggest tourism operators in Crete,” he added.

“At this point in the season most hotels on the island have accumulated considerable debt to suppliers — a million or two euros at a big resort, for example, or half a million at a smaller hotel.”

Scores of hotels on Corfu and Zakynthos in the Ionian Islands are also owed money, along with operators on Rhodes and Kos in the eastern Aegean.

It is unclear whether or not they will get it back. Two hoteliers told the Financial Times that the Atol protection scheme funded by the UK travel industry would cover the bills for guests who were staying with them at the time of the liquidation announcement, but not for those who had already checked out. The Civil Aviation Authority could not be reached for comment.

The financial pressure that the collapse of the British firm will inflict on European hotels has led to tensions between guests and hotel managers, with reports of hotels from Tenerife to Tunis handing bills to guests who had already paid hundreds of pounds to Thomas Cook.

Jack Moore, a marketing executive from the British town of Hull, said his hotel near the Turkish town of Alanya was demanding £1,400 for his stay with his parents and two siblings. “We all work very hard to afford holidays,” said Mr Moore, 22, whose family paid a total of £2,000 for the two-week trip. “To then be asked to pay again at the hotel is appalling.”

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The Turkish culture and tourism ministry warned hotels that those who demanded payments from customers or tried to evict them would be prosecuted. It has also promised a €50m loan support package for businesses that are hit by the collapse in a bid to limit the damage to a pillar of the Turkish economy, which brought in $29.5bn in revenue last year.

Since Monday’s news, hotel owners have been tied up with helping their guests to return home safely. But they are also turning their attention to how to limit damage in the future, offering special deals and seeking to lure back former guests.

“We will do our best to recover the rest of season,” said Mr Cakici. His Turkish hotel is not at risk of going bust, he said, thanks to a decision last year to hedge its bets by forging ties with another tour operator. Others may not be so lucky.

Stelios Asimakis, the owner of a medium-sized hotel in western Crete, said Thomas Cook had been a lifeline for many in his industry. “We believed that Thomas Cook offered stability, and not just for the big resort operators,” he said. “What happened at the weekend was a bitter blow.”

Via Financial Times