Thomas Cook collapse costs Greece 2.5 bln euros and counting

October 2, 2019

 

 

The collapse of UK tour operator Thomas Cook will directly cost Greek hotels some 315 million euros but the broader fallout for the economy is seen reaching 2.5 billion euros next year, according to an industry report.

 

The damage to the country's vital tourism sector indicates the challenges faced by Greece in recovering from its deep economic crisis as the global environment slows amidst growing uncertainties, such as Brexit.

 

Thomas Cook's demise may also harm strong investment activity in the country's commercial real estate sector as billions pour into Greek hotels, leading an uptick in the property market.

 

The report, prepared by the Institute for Tourism Research and Forecasts (ITEP) on behalf of the Hellenic Chamber of Hotels, shows that out of Greece's total 9,917 hotels, 1,193 worked with Thomas Cook this year. About half of these hotels fall in the 1, 2 or 3 star category. 

 

However, there are other far reaching effects to the industry and economy.

 

The report shows that estimated losses in arrivals and overnight stays in the tourism sector for next year will be in the range of one billion euros, while the fallout for the broader economy (taking into account the sector's multiplier effects) will be at 2.5 billion euros in 2020. 

 

Greece is among the countries hardest hit by the banktruptcy, along with Cyprus, Turkey and Spain.

 

In a bid to offset the damages, Greece has put together some relief measures but the country has little wiggle room on its fiscal policy as it is bound to tough fiscal targets imposed by international creditors. The government's relief package includes an exemption from a nightly stayover tax paid by hotels.

 

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