After the British travel giant Thomas Cook collapsed, India's inbound travel could be severely hit and hence adversely impact foreign exchange (forex) earnings too in the months to come.
Thomas Cook UK sends a lot of high-spending tourists to India from countries such as UK, Germany and France. Countries like UK, Germany and Italy where Thomas Cook has a good presence are the key source markets for India.
Among the top European source markets, German tourists accounted for 1.85 per cent of the total FTAs in the previous month. The total FTAs in August 2019 were 7,98,587 as compared to 7,86,003 in August 2018, registering a growth of 1.6 per cent.
With global slowdown casting its shadow on travel business, the FTA growth is likely to be slow in coming months. With Thomas Cook, one of the world's top travel firms, going bankrupt, the travel business is certainly going to see a tough time.
Ruling politicians in Goa, including Chief Minister Pramod Sawant, on Tuesday expressed concern over the closure of British travel firm Thomas Cook, saying the development would impact international tourist footfalls in the coastal state in the forthcoming tourism season.
“When such a tourism company shuts down, there will definitely be some effect on the state,” Sawant told reporters at the State Secretariat.
After 178 years of operation, British tour operator Thomas Cook, one of the world’s oldest travel brands, with 19 million annual customers, closed shop on Monday. The company announced that it would be liquidating its assets and filed for bankruptcy, despite attempts to rescue the brand.
At the moment of its collapse, Thomas Cook had a debt of 1.7 billion pounds (about $2.1 billion), an amount the chief executive, Peter Fankhauser, had called “insurmountable”. It had been in negotiations to obtain $250 million in emergency financing when it declared bankruptcy.
About 6,00,000 travelers around the world were affected, 1,50,000 of them from the United Kingdom and about twice as many from Germany, said airline industry analyst Bob Mann, and more than 20,000 employees worldwide found themselves without a job.
Competition from OTAs, Declining interest in Package Tours, Operating it's own airlines, Brexit are amongst the main reasons believed to have caused the downfall of Thomas Cook UK.