Thomas Cook collapse creates hotel crisis in Spain and Greece

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The resort town of Los Gigantes on Tenerife in the Canary Islands.
The resort town of Los Gigantes on Tenerife in the Canary Islands.

Spain and Greece are scrambling to mitigate the economic impact of Thomas Cook's collapse, which has dealt a major blow to hotels.

The demise of Thomas Cook Airlines, which transported many Brits to Spain on scheduled and charter flights, has left some destinations with significantly less airlift. Meanwhile, hotels and resorts that had relied heavily on Thomas Cook's wholesale business to sell the bulk of their inventory are now facing financial insolvency.

According to reports, the Spanish Confederation of Hotels and Tourist Accommodation expects that up to 1.3 million travelers will be unable to fly into Spain in the coming fall and winter months. It also estimates that around 500 Spanish hotels are at risk of imminent closure.

The Spanish government has responded with rescue measures, including a credit line for struggling businesses and subsidies to buoy the Canary Islands and Balearic Islands, the two most popular winter destinations in Spain for Thomas Cook customers.

Greece also is bracing for a major financial hit. Alexandros Vassilikos, president of the Hellenic Chamber of Hotels, called the Thomas Cook situation "one of the biggest crises we have had to deal with so far."

A survey of 10,000 Greek hotels conducted by the trade group indicates that around 1,200 properties were working with various Thomas Cook organizations at the time of the company's collapse. That number includes hotels branded under Thomas Cook Hotels & Resorts -- which includes the Sentido, Casa Cook and Cook's Club flags, among others. Many other hotels had counted on Thomas Cook for more than 75% of their sales.

"These hotels are on the priority list in all discussions, in order to apply measures that will allow them to operate again next year," said Vassilikos. He said the Hellenic Chamber of Hotels will work with national and regional authorities to try to replace flights and increase advertising for impacted markets. 

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