Greece in limbo: How is Crete handling the Thomas Cook insolvency? | DW Travel | DW | 26.09.2019
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Greece in limbo: How is Crete handling the Thomas Cook insolvency?

The British travel company was one of the major players in Crete’s tourism sector. After the Thomas Cook fallout, DW’s Susan Bonney-Cox spoke with holidaymakers and local hoteliers on Greece's largest island.

Flight information display board from above with people walking underneath at Heraklion on Crete, Greece (picture-alliance/Markus Mainka)

Flight information display board at Heraklion on Crete, Greece

At the best of times, Heraklion airport, the second largest in Greece, resembles an experiment in chaos theory, with huge unruly queues forming of people wanting to check-in and clear security. On Wednesday, it was a lot more subdued. What was new in the departures check-in area were the number of UK Civil Aviation Authority (CAA) staff, easily recognizable by their yellow vests adorned with large Union Jack flags, standing by to advise travelers who were due to fly back to the UK. Mingling among them were holiday representatives, who were also making sure that everyone checked in ok.

Homeward bound, one way or another

The holidaymakers standing in line were very relaxed and when asked about how they had dealt with the news that broke on Monday, that Thomas Cook had gone under, they were all rather philosophical. "What's the point in worrying," a lady from Birmingham said, adding "it's not like we can change anything." Her friend chipped in: "We promised each other not to worry because we knew we'd get home, one way or another. The only thing that we've been doing a lot since Monday is checking the internet to stay abreast of the news."

Group of smiling tourists in front of an airport kiosk at Heraklion on Crete, Greece (DW/S. Bonney-Cox)

Still smiling despite finding themselves in the largest peacetime repatriation in British history: The British government will be bringing back an estimated 150,000 stranded tourists from around the world

When told that this report was for Deutsche Welle, they were very complimentary of the German government for being expected to step up to help Condor, one of the German airline subsidiaries of Thomas Cook, with a €375 million ($410 million) bridging loan.

They lamented that the British government had not done the same for Thomas Cook. British Prime Minister Boris Johnson said the UK government should not bail out Thomas Cook, arguing that doing so would create a "moral hazard" because other firms might expect similar treatment in the future. The women at Heraklion airport also used the opportunity to stress that they were not supporters of Brexit — which they saw as a major factor in the decline of Thomas Cook. 

On the display board, a canceled flight to Manchester and under it is the British government organized replacement flight, people can be seen below. (DW/S. Bonney-Cox)

On the board a canceled flight to Manchester and under it is the British government organized replacement flight

No more package holidays

A woman wanted to mention how wonderful the holiday representatives had been in not only reassuring, but keeping tourists informed and generally going the extra mile in any way they could. And all this even though they will probably not be paid for the work they've been doing for the last few days and will most likely be out of a job soon.

All the people at the airport were happy to speak about their experiences and even have their picture taken — but none wanted to be named. A family from Chester said the only extra cost they had incurred was that they had to pay for a taxi to get to the airport as the transfer buses were no longer running.

They didn't know how successful they'll be in reclaiming their money, but also said that compared to others their loss would be comparatively small. They also said that in future they will only book flights with reputable carriers, and find their hotel online. Package holidays for them are a thing of the past.

Tourists, pleased that they will be home soon, at Heraklion airport in Crete, Greece(DW/S. Bonney-Cox)

Pleased that they will be home soon

Business as usual

Heraklion airport management said they hadn't really noticed a change in their day-to-day business over the demise of Thomas Cook. The airport authority explained that the British government had immediately dispatched Civil Aviation agents who had taken over the handling of stranded tourists, so the airport didn't have to provide extra staff.

They were also not overly concerned by a potential reduction in passengers or flights in the future. The only worry on this Wednesday morning would be if Neckermann, the German subsidiary of Thomas Cook should go insolvent. Little did they realize that within a few hours, an announcement to that effect would be made. Neckermann, according to airport statistics from September 16, accounts for 80% of travelers at Heraklion airport. The hope voiced by the airport management was that should Neckermann go under, the fact that the end of the season was near, might lessen the blow. One manager said: "The season officially ends on November 20 and by next year there will hopefully be flights and tour operators to fill the gaps." 

On leaving the airport there were a few Thomas Cook agents at the rather deserted desk. Very understandably they were not interested in talking to the press — they said they'd been working 24 hours a day since Monday to ensure that holidaymakers would get home and didn't want to risk losing any potential pay they might still get, by making statements to journalists.

Rather quiet Thomas Cook counters at Heraklion Airport, Crete, Greece (DW/S. Bonney-Cox)

The Thomas Cook desks at Heraklion airport were rather quiet — but staff were still working to ensure holiday makers got home

Worst blow since the financial crisis

On Crete, the collapse of Thomas Cook will mostly cause the greatest losses for hotels. The president of the Heraklion Hoteliers Association, Nikos Chalkiadakis told DW that next week 26 hotels on Crete and 48 in Greece in total will have to close, as they were exclusive Thomas Cook hotels. "This is a massive blow — as bad as the financial crisis a few years ago," he told DW.

These affiliated hotels had hoped against hope that Thomas Cook might still be saved — but the financial burden has been considerable. Thomas Cook has not paid any of its affiliated hotels since July 15, 2019. So even if the hotels tried to sell the now-empty rooms to other operators, their debts are crippling.

Nicos Chalkiadakis, Chairman of the Hotel Association Heraklion, sits at his desk in Crete, Greece (DW/S. Bonney-Cox)

Nicos Chalkiadakis is still smiling despite not sleeping much since Monday morning's news that Thomas Cook had gone under

Fifty-four-year-old Nikos Chalkiadakis runs five hotels in the seaside village of Stalis (Stalida), on the north coast of Crete about 25 kilometers (15.5 mi) from Heraklion. He says: "The impact on my business will be considerable as Thomas Cook owe me approximately €650,000 ($710,000) and I fear I will never see that money." He is constantly answering calls on his mobile phone, which is always within easy reach, because he is heading up a delegation that is trying to negotiate with the Greek government to help the ailing hotel businesses. 

They are hoping that Athens might grant exemption from VAT and other tax and social security payments, to help keep these businesses going. Chalkiadakis is convinced that by next year there will be plenty of new tour operators to fill the gap left by Thomas Cook, at which stage it would be helpful if there were still hotels for them to book. Should the government help keep these hotels going it will also mean that jobs can be saved, sparing Crete from a rise in unemployment. 

Holidaymakers continue to enjoy their vacation at the seaside under umbrellas. There are already noticeably fewer visitors in the seaside resorts here on Crete (DW/S. Bonney-Cox)

Holidaymakers continue to enjoy their vacation at the seaside - though there are already noticeably fewer visitors in the seaside resorts

Thankfully, the season is nearly over

A short stroll from Chalkiadakis' hotel lobby puts you in the middle of a busy sandy beach. Here, at first glance, little effect of Thomas Cook's demise is noticeable, as folks go about enjoying their holidays. On this beach in a little hut sits Stephanos, who runs the Skyride boat tours & paragliding. He says that as a service provider in the final weeks of the holiday season his business has not suffered.

"Thankfully the season is nearly over, and I have already met my annual targets. Next year might be difficult if fewer tourists come." He says he feels sorry for all the affiliated businesses that will now suffer. "If hotels must close or have fewer tourists staying, then the whole infrastructure will suffer. The food suppliers, starting with the farmers, as well as the laundry and cleaning service providers will all have to cut down on personnel." 

Stephanos with his team at the sandy beach on Crete, Greece (DW/S. Bonney-Cox)

Stephanos with his team — business as usual, for the time being

Walking through Stalis it's obvious the seaside village depends on tourism. The road alongside the beach is full of souvenir shops and bars and restaurants that cater for German and British tastes — like the "Rover's Return Pub." Kostas, who runs this British-style pub with his wife, says that already there were noticeably fewer visitors. Next year he might have to reinvent his business and target it at a different demographic if British tourists stay away due to the collapse of Thomas Cook and the possible knock-on effect of Brexit.  

British style Rover's Return Pub in Stalis (Stalida) on Crete, Greece (DW/S. Bonney-Cox)

Stalis caters for mainly British and German tourists

Propping up the bar, however, were two German tourists. They said that the insolvency of Neckermann, with whom they booked their trip, means that in future they will think twice before opting for a package holiday. But for now, they were not going to let the day's news spoil their vacation.

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