Thomas Cook’s collapse has had ramifications across the world. In the UK, the government hopes to repatriate up to 150,000 stranded Brits abroad. In Germany, Federal and State governments are looking to loan 380m euro to Thomas Cook subsidiary, Condor. Yet, there is another group of people who can no longer sleep at night, Ministers of Economy.
Thomas Cook was sizable
In order to understand the importance of Thomas Cook’s collapse, it is first necessary to understand the company’s scale. And indeed, Thomas Cook was sizable.
According to the Company’s 2018 financial report, the company employed 21,000 people in 16 different countries.
In addition to owning 100 aircraft across the group’s airlines, the company also operated 186 own-brand hotels and resorts. In the Canary Islands, for example, the group owned 20 hotels, 29 in Turkey, three in the Gambia, and more than 10 in Tunisia.
Moreover, the company partnered with internet giants such as Expedia, further diversifying its hotel and accommodation partnerships beyond its own portfolio.
Taken together, the Thomas Cook Group had 22m customers in the 2018 reporting period.
Ministers, hoteliers are worried
Considering Thomas Cook’s size, the company’s collapse will not go noticed by hoteliers and even government budgets.
In Greece, for example, Thomas Cook brought over 1m British tourists to the sun-soaked European country, reports Deutsche Welle. Experts further told the German news service that Thomas Cook’s collapse could cost Greece between 250 to 500m euro.
On the other side of Europe, the story is no different. El Pais reports that Thomas Cook managed 63 hotels and employed 2,500 workers in Spain. Its demise will be acutely noticed particularly in the Canary and Balearic Islands, where the group accounted for 25% and 15% of all visitors, respectively.
Turning to the African continent, Thomas Cook brought in 40% of the Gambia’s annual visitors, according to Reuters. Moreover, the news organization reports that Thomas Cook had exclusivity deals with 45 hotels in Tunisia.
Tourism can be a vital economic lifeline
For a low-income country like the Gambia, tourism accounts for more than 20% of GDP according to UNCTAD. Reuters, however, reports that this number is closer to 30% of GDP output.
Turning to lower-middle-income countries like Tunisia, for example, tourism not only accounts for 8% of economic output but also employs some 400,000 people.
In terms of employment, the WTTC estimates that around one-quarter of all employment in Greece is based in travel and tourism.
In Spain, the organization estimates that 14.7% of all jobs are employed in the tourism sector. Additionally, it is believed that one out of every seven euro generated in the economy, comes from tourism.
Globally, the WTTC estimates that 10.8% of global GDP is generated in the travel and tourism sector and supports one in ten jobs.
The wide-spreading impacts Thomas Cook’s collapse are thus abundantly clear.
In addition to the 21,000 direct job losses and hundreds of thousands of stranded passengers, the 178-year old company’s demise could very well jeopardize the economies, and the social peace, of the countries Thomas Cook once operated in.
Indeed, travel, tourism, and aviation, have a much broader impact than some care to see. In turn, the social policies affecting the industry, must take these ramifications into account.
Have you been affected by Thomas Cooks’ collapse? Do you think other companies could fill the voids left by the British tour operator? Let us know in the comments.