The stand-off between Thomas Cook and Spanish hoteliers will be resolved by next Wednesday, said Ignacio Vasallo, director of the Spanish Tourist Office in the UK.
Thomas Cook sparked outrage recently when it announced it was renegotiating its contracts with hoteliers in a number of countries, including Spain, refusing to pay the last 5% of the amount for the rooms it had contracted for August and September.
The company blamed market conditions, following a tough year. An unimpressed Spanish Confederation of Hotels and Tourism (CEHAT) responded by threatening to launch a legal challenge for an alleged breach of contract.
“Thomas Cook is going to find a way out. It knows it cannot work without the goodwill of Spanish hoteliers,” said Vasallo, speaking at WTM yesterday.
While Vasallo does not expect Thomas Cook to back down, he said both sides are getting closer to finding a workable solution they are happy with and the ongoing meetings between the two sides are starting to bear fruit. Thomas Cook, for example, is considering increasing capacity to sweeten the pill.
“We have to find a way where no one loses face,” said Vassallo. “Things are certainly a lot smoother than they were two weeks ago.”
Vasallo, who had recently met Thomas Cook chief executive Manny Fontenla-Novoa, also expected to see the legal challenge dropped by next week and dismissed as rash the reaction of some Spanish hoteliers who said they would stop working with Thomas Cook, pointing out the operator carries 1.3 million UK passengers a year, accounting for approximately 10 million bed nights.
While he said: “This is not a proper way to do contracts,” referring to Thomas Cook’s actions, and said Thomas Cook would not get away with acting in this way, Vasallo was sanguine about the possible long-term consequences.
“We’re not going to stop working with Thomas Cook,” he said. “We’ve been working with the group for 75 years and will do so for the next 75 – on good terms.”
Vasallo said Spain had seen a 6.62% decrease in UK visitor numbers for the January to September 2010 period, representing a dip from 10.9 million visitors to 10.2 million. Figures for April were the worst, with the fall out from the Ash cloud resulting in a 27.7% decrease in UK visitors for the month, year-on-year.
Looking to 2011, Vassals said he was optimistic about Spain’s prospects, not least as the £1 APD increase compared favourably to competitor destinations such as Egypt, where is has increased from £45 to £60, and the fact that operator failures affect it less than, say, Turkey, where they constitute a larger part of the market. He also said operators, including easyJet and Monarch, are adding capacity from the UK.
“Things are not so bad after all,” said Vasallo. “I look to the future with lots of optimism. Tourism is one of the most dynamic sectors in the Spanish economy.”
He added: “We’re going through a ‘plateau’ which will last a few years – then we’re going to see growth.”
- More from World Travel Market at travelweekly.co.uk/wtm2010