The association representing hotels in Malta has urged members to resist Thomas Cook’s move to slice 5% off payments, branding it “unethical”.
The Maltese Hotels & Restaurants Association (MHRA) has advised its members not to do anything that confirms agreement to the cut and to “stick to their guns” to demand payment in full.
On Friday, it emerged that Cook contracting staff had been phoning hotels in some key European destinations to say the operator would be paying 5% less than contracted in August and September due to a difficult summer and the ash crisis.
The operator would not say how many properties were affected, but hotels in Greece, Malta and Spain are now known to have been contacted.
Thomas Cook has declined to make on official comment but insisted it had been liaising with affected hotels individually and had been “encouraged by the majority of feedback we’ve received” after “initial concern”.
However, Spanish hotel associations have threatened legal action and the Canary Islands government has asked the Spanish government to intervene, Travel Weekly understands.
Hotel association Hosbec has demanded the 5% discount demand be removed. It stressed that Spanish hoteliers had supported Cook this year through crises such as the ash cloud flights ban.
Senior travel industry observers said the reaction in Spain was the most angry they had ever seen, the 5% cut coming after hoteliers have been praised for cutting prices but warned that they wouod have to “pass on some of the pain”.
George Schembri, chief executive of Malta’s MHRA, said: “This is not the way to do things. It’s unethical the way they are doing this. We have contracted rates. You don’t see Thomas Cook giving us a 5% bonus when they are doing well.
“If they have a problem, they should come to use to ask for a contribution, not withhold payment. Rates have dropped considerably and we are coming out of a very bad year and carrying losses.”
“It works both ways,” Schembri added. “We are very glad to have Thomas Cook on the island and we would like to keep working with them, but not in this manner.”
Malta is due to host the travel industry at the annual Travel Convention organised by trade association Abta next month.
Travel Weekly understands some hoteliers in Spain had demanded Cook confirm the cut in writing, threatening not to accept Cook customers if it did not.
A source said: “Operators negotiate all the time with hoteliers but it’s a bit extreme to carte blanche tell all hoteliers you are going to take 5%.
“Normally you would sit down with a hotel and say it’s been tough and negotiate. I have not heard of this happening in the past.
“You would expect other big operators to be watching this closely. If Thomas Cook gets away with it then Tui will follow suit.
“The Spanish have been sensible on price over the last couple of years, particularly in the Canaries, so for Cook to turn around after the year they’ve had and say we’re going to take 5% is pretty tough.”
“Spain has also had a desperately poor year with domestic tourism this year, but Thomas Cook are very big and have a lot of power.”
Another source said rates for destinations such as Spain were already as low as they have ever been historically and that co-operation from hoteliers this year on price had been “superb”.
Thomas Cook said the 5% payment cut for August and September represented just 1.5% over the whole summer.
The operator insisted again today that the furore in Spain was “old news” and had been resolved following a “small amount of concern”.
FTSE 250-listed Thomas Cook is due to give a trading update later this month as it heads towards its year end, that will reveal how it fared during the vital summer holiday period.