The Caribbean Hotel and Tourism Association (CHTA) have been angered by a move by leading UK tour operator Thomas Cook to reduce payments by 5% for August and September arrivals.
It was believed that the Caribbean hotels were unaffected when hoteliers in Spain, Malta and Greece spoke out earlier in the month about the reductions; however it has now emerged that it will affect all destinations featured by Thomas Cook UK.
Thomas Cook has defended their actions by saying the move was necessary to recoup some of the losses incurred during the ash cloud cancellations. The other option would be to reduce capacity, and they would prefer not to have to do that. The action could also see hoteliers putting their prices up next year to counteract the risk of loss to them if Thomas Cook decides to do the same thing again. They might also have to cut service levels to cover extra costs, which would be detrimental to Thomas Cook in the long term.
The tour operator has contacted the affected hotels verbally but has refused to put the change in writing for them.
The Cancun Hotel Association has sent a letter to Thomas Cook Group chief executive Manny Fontenela-Novoa asking them to revise the decision to reduce payments, and is threatening to take legal action for “withholding funds agreed upon in signed tour operator contracts”.
Spanish hoteliers have also vowed to take action if the tour operator refuses to back down on the issue.
Director General of the CHTA, Alec Sanguinetti said, “We can’t have any company taking unilateral and unauthorised monetary deductions because they experienced a drop in their earnings, no matter how steeped in history and credibility they have accumulated over the years.” He added that it makes a mockery of the whole contractual system.
The CHTA is sending a letter to Thomas Cook expressing its concerns over the lowered payment and are also advising its members to do so on an individual basis.
In response Thomas Cook confirmed that all destinations featured by Thomas Cook UK were affected, but stressed that most hoteliers had given them positive feedback on the news.
Leading travel lawyers have also suggested that If hoteliers across the world go ahead with legal action against Thomas Cook, then the industry giant could find themselves losing more money than they would gain from the 5% cost reduction.
Dafydd Pugh of solicitors; Berrymans Lace Mawer stated “Cook will have to consider whether, when faced with potentially costly litigation, pushing ahead with this proposal will achieve the savings it anticipates.”
Other tour operators have indicated they will not follow suit with TUI UK’s communications director, Christian Cull stating “We want to stand by our key suppliers. If they are going through difficult times, we want to work with them, not issue mandatory discounts on them.”
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