Mexico tourism affected by USD $23 million after Thomas Cook collapse
Thomas Cook was founded in 1841 – Photo: Phil Noble/REUTERS

Mexico tourism affected by USD $23 million after Thomas Cook collapse

25/09/2019
14:41
Newsroom & Agencies
Mexico City
Dave Graham, David Alire García, Kate Holton, Alistair Smout, Noor Zainab Hussain, Guy Faulconbridge, Stephen Coates & Mark Potter/REUTERS & Tláloc Puga/EL UNIVERSAL
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On Monday, the collapse of the world’s oldest travel firm Thomas Cook left hundreds of thousands of holidaymakers stranded. The liquidation marks the end of a British company that started in 1841 running local rail excursions and grew to pioneer the family package holiday

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The collapse of British travel firm Thomas Cook will not have a “significant impact” on Mexico’s tourism industry as it only represents about 0.4% of the sector’s foreign income, the Mexican Tourism Ministry (Sectur) said on Tuesday.

In a statement, the ministry said it expected other travel firms to step in and absorb the British demand hitherto covered by Thomas Cook.

Cancún, one of the favorite beach destinations of foreign tourists would stop receiving USD $23 million between October and December of this year due to the collapse of Thomas Cook.

That is a loss equivalent to MXN $450 million in case all scheduled tourists lost the trips to Cnacún they bought from Thomas Cook.

Sectur detailed that, within the several destinations of our country, Thomas Cook only flew to Cancún, supplying 112,846 plane seats last year, of which 664 came from Belfast; 13,739 from Glasgow; 33,548 from London, and 66,933 from Manchester.

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“The Tourism Ministry expresses its trust in that the suspension of activities of Thomas Cook will not affect majorly the flow of tourists from the UK to our country, for there are other larger companies, like TUI, Wamos, or Transat, that will step in and absorb the demand with the absence of Thomas Cook,” Sectur said in a release.

British are the third nationality that visits Mexico the most, only after Americans and Canadians, according to information from the Unit of Migration Policy of the Interior Ministry (Segob).

Last year, Thomas Cook generated income from tourist spending of USD $100 million for Mexico, or about 0.4% of the total, it said.

On Monday, hundreds of thousands of holidaymakers were stranded by the collapse of the world’s oldest travel firm Thomas Cook TCG.L, sparking the largest peacetime repatriation effort in British history.

The liquidation marks the end of a British company that started in 1841 running local rail excursions and grew to pioneer the family package holiday.

Running hotels, resorts and airlines for 19 million people a year, it has around 600,000 people abroad and will need the help of governments and insurance firms to bring them home from places as far afield as Cancún, Cuba, and Cyprus.

Thomas Cook’s demise, announced in the early hours of Monday after it failed to secure a deal with creditors or a government bailout, sparked alarm at hotels where some customers have been asked to pay their bills anew by out-of-pocket resort owners.

As well as its 21,000 employees, the company’s fall hit global booking websites, credit card companies, travel firms using its airlines and British high streets where its travel agents were forced to shut.

Tour operators selling customers transport, accommodation, and excursions in a single package have been struggling for years due to the rise of budget airlines and cheap online competition from the likes of Airbnb.

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Some have carved out a niche in specialist trips such as safaris. But Thomas Cook struggled to adapt due in part to a USD $2.1 billion debt pile built up over a series of ill-fated deals. It had to sell three million holidays a year just to cover interest payments.

The company had agreed a £900 million rescue package with its banks and largest shareholder, China’s Fosun, but lenders asked for an additional £ 200 million to keep it operating through the winter.

In desperate meetings over the weekend, it failed to secure more funds, with the British government also refusing a bailout, judging it was not a good long-term bet.

The second-largest shareholder Neset Kockar, a Turkish businessman, said the company would now be sold as a whole or in parts.

Prime Minister Boris Johnson pledged to get stranded British travelers home, another headache for his government as it tries to negotiate a fiendishly complicated withdrawal from the European Union.

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