The Collapse of Thomas Cook and Its Impact on the Arab World
After 178 years in the travel business, one of the oldest household names in the British tour operating sector, Thomas Cook, has collapsed, stranding around 600,000 travelers and jeopardizing 21,000 jobs.
When talks on a buy-out did not reach a viable end, the British tour operator released a statement to the public indicating that its board “had no choice but to take steps to enter into compulsory liquidation with immediate effect”. Shortly afterwards on Twitter, the UK Civil Aviation Authority stated that all Thomas Cook booking have been canceled.
“This marks a deeply sad day for the company which pioneered package holidays and made travel possible for millions of people around the world,” Peter Fankhauser, Thomas Cook’s chief executive said.
“Despite huge efforts over a number of months, and further intense negotiations in recent days, we have not been able to secure a deal to save our business. I know that this outcome will be devastating to many people and cause a lot of anxiety stress and disruption,” he added.
Brexit has taken its toll on many British businesses with the lowering of the pound and according to CNN Business, the company had reported a loss of USD 1.9 billion for the six months to March 31. Furthermore, Thomas Cook’s business model of flying customers on its own airline and then settling them in hotel rooms around the world has been pressured for years with the rise of online rivals and cheap carriers.
The collapse has sent ripples around the world with shares growing in home-turf rivals in Europe such as Germany’s TUI and the low-cost airline EasyJet.
Other than the Arab travelers stranded around the world, the collapse of Thomas Cook had major impact on the MENA region. Experts are expecting shares in Travco and other homegrown travel brands to grow over the upcoming quarter.
According to Al-Masry Al-Youm, Kamel Abo Ali, Head of the Red Sea’s Investors Group, pleaded with tourism officials in Egypt to kick off a number of tourism marketing campaigns around the world, because the collapse of Thomas Cook can only have a negative effect on tourism in Egypt. His statement came after Blue Sky, Thomas Cook’s agent in Egypt, announced the cancellation of booking orders for 25,000 tourists coming to Egypt until April 2020.
Sٍimilarly in Tunisia, the Minister of Tourism Rene Trabelsi stated that currently there are around 4,500 tourists stranded in his country because of the British tour operator’s collapse. He continued on to reveal that the company owed around EUR 60 million to Tunisian hotels for the months of July and August.
Over in Morocco, the government has created an emergency committee to oversee the return of stranded travelers to there home countries. Morocco has been one of Thomas Cook’s most-visited destinations, announcing in July of 2019 plans of a new line connecting London to Marrakesh.