By Elizabeth Broomhall
The number of French tourists to the Middle East has dropped significantly in the first three quarters of this year amid the ongoing political turmoil, European travel agency Thomas Cook has said.
North African countries Tunisia, Morocco and Egypt have been hit the hardest by the recent trend, seeing huge falls in the numbers of French visitors, who typically account for a large proportion of their tourism revenues.
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“The impact of the ongoing political unrest in the Middle East and North Africa has been higher than we previously forecast, particularly on our French operations,” a spokesperson from Thomas Cook told Arabian Business.
“MENA is normally the principal destination of choice for French holidaymakers, but due to the unrest they are deciding to holiday at home in France instead.”
As a result of recent events, the travel agency, which is still finalising its Q3 financial results, said it expected profits to stand at £20m ($31.6m) for the period – £5m less than the same period last year.
“This would leave us approximately £40m behind our cumulative prior year result as we enter the last quarter of our financial year,” the spokesperson said.
“We therefore expect full year underlying operating profit to be around £320m compared with £362.2m for 2009-2010.”
At the height of the North African revolutions, Europe’s second-biggest tour operator said the cost of cancelled trips to Egypt and Tunisia and of repatriating customers may reduce profit by about $32m.
Its larger rival TUI Travel, anticipated similar a decline of £30m.
Upon issuing a new profit warning this week, Thomas Cook shares plunged 30 percent, slashing the firm’s market value by £300m.
Since the start of the year, the company has been redirecting its resources to more secure destinations, such as Europe.
As early as February the travel agency was even scrapping trips from some European countries to Egypt and Tunisia and bringing customers home early.
Egypt accounts for about seven percent of Thomas Cook’s annual profit, according to John Beaumont, an analyst at Matrix Capital in London.
Among the company’s main offers to French tourists are package deals, flights and accommodation to various destinations such as Sharm El Sheikh, Luxor and Tunis.
When interviewed by Arabian Business at the start of the year, Beaumont said that if bookings to Egypt could return to normal by the summer season, the impact on the likes of Thomas Cook could be contained.
Egypt is currently offering financial incentives to tour operators in the UAE and Europe in a bid to tempt visitors back and maintain chartered flights to the country, Egypt’s tourism ministry said in May.
Under the scheme, the government has said it will subsidise half-full inbound flights until October and offer cash benefits to travel agents in exchange for running marketing campaigns for the Arab state.
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