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Tuesday, 24 September 2019

Thousands of Thomas Cook reservations in Egypt canceled as company goes bust

Thousands of Thomas Cook reservations in Egypt canceled as company goes bust: Egypt could lose thousands of tourists after British travel group Thomas Cook yesterday went into liquidation. Local operator Blue Sky Group was expecting 100k tourists to visit Egypt via Thomas Cook in 2020 and has canceled 25k reservations booked up to April 2020, Chairman Hossam El Shaer said in a statement sent to Reuters.

“Evacuations” from Egypt: The collapse of the world’s oldest travel firm has prompted a huge operation by governments and insurance companies to bring some 600k travelers stranded around the world back home, including 1.6k in Hurghada. Private carrier Nile Air has begun operating twice-weekly flights from Marsa Alam to the UK to transport stranded British tourists back home, Managing Director Yousry Abdel Wahab told Al Mal. The British government will reportedly cover the costs of the flights, according to Abdel Wahab.

The potential loss of thousands of visitors is a bit more than a rounding error for Egypt’s tourist industry, which has only recently been recovering from setbacks earlier this decade. Egypt was one of Thomas Cook’s most rapidly growing markets, with bookings up by 30-40% in 2019 as tourists flocked to Hurghada and Marsa Alam. Tourism Ministry sources speaking to the local press expect the effect to only last a month or two — with the winter season bearing the brunt of the impact — before bookings return to their normal levels before the tour operator’s bankruptcy.

The impact on Orascom’s El Gouna projects is “immaterial”: Orascom Development Egypt (ODE) said it is insulated from the impact of the liquidation despite having an EGP 200 mn agreement with Thomas Cook to open two new hotels in El Gouna. The impact on Orascom’s operations of the bankruptcy is expected to be “immaterial” in the short term, Orascom Development Holding said in a statement yesterday. The agreement to develop Casa Cook Hotel and rebrand Arena Inn into Cook’s Club Hotel was announced in December 2018, with Cook’s Club originally scheduled to open its doors in August and Casa Cook in October. “Fortunately, we are in the situation to confirm that we already collected the upfront payments from the company for these hotels and that we are finalizing the construction of the new 100 room hotel planned to be operational in October,” the statement reads.

Background: The collapse of the industry giant came early yesterday after it failed to reach an agreement with its creditors. The company — involved in tourism in Egypt since the late 1800s — had struggled in recent years under a USD 1.7 bn debt pile. We reported in April that it was seeking investors after seeing its share price plummet around 80% in the previous year. Its mounting interest bill prevented it from keeping up with online competition, and events including Britain’s ban on flights to Sharm El Sheikh in 2015, a coup attempt in Turkey in 2016, and Europe’s 2018 heat wave all impacted its profit margin.

On the bright side: Our tourism sector was ranked first among African peers for the first time since 2013 by Bloom Consulting in its Country Brand Ranking report (pdf) released yesterday. “Egypt is a role model for other countries in all continents due to its ability to show resilience and reinventing itself, despite a period of political unrest and being a target of terrorist attacks,” the company said.

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