Terror forces travel industry to overhaul vacation destinations

Jessica Hartogs, Special to
EgyptAir events signal disruptive environment: Thomas Cook

The travel sector has had to "completely remix" its vacation destinations following security problems and threats of terrorism, one of Europe's biggest tour operators has told CNBC.

The tourism industry has been badly hit by factors such as security and terrorism over recent years. Destinations such as Egypt and Turkey have lost enormous amounts of visitors, who are choosing to go to places such as Spain and the Caribbean instead.

"This year we've been able to completely remix our holiday program from Turkey, Egypt, Tunisia, and taking 1.2 million bookings from there to Spain or other destinations… the Canaries [Islands] are up 27 percent, long-haul is up 40 percent, so there is a response that we're managing," Michael Healy, chief financial officer at Thomas Cook, told CNBC Thursday.

Continental Europe has also not been spared from loss of tourism following terrorist attacks in Paris and Brussels in the past year.

"Our Belgium business is significantly impacted. We will certainly make less money there this year," said Healy.

Long-haul travel demand remains strong: Thomas Cook CFO
Challenging environment for Thomas Cook to operate in: CFO

Healy added that Thomas Cook would continue to adhere by U.K. government advice regarding holiday destinations.

"The U.K. government at the moment still does not allow any flights to Sharm [Sharm el-Sheikh] the airport there is closed. There are still some holidays being offered to Hurghada, that's something that we take advice from government – it's not something Thomas Cook does itself but you can be assured the welfare of our customers is very much at the forefront of our views," Healy told CNBC.

Thomas Cook announced its first half revenue of $3.9 billion on Thursday. However, it reported summer bookings to be down 5 percent, specifically affected by tourists no longer traveling to Turkey – one of its most popular destinations last summer. Healy said that holiday prices in Turkey were down 15-20 percent.

The holiday company's results were announced on the day EgyptAir flight MS804 disappeared en route to Cairo from Paris, early Thursday morning European time. There is still no official news on what happened to the flight, which had 66 people on board, including crew.

Shares of Thomas Cook were down over 18 percent in morning trade Thursday. The travel sector overall was down almost 1 percent.

Also on Thursday, the U.S. embassy in Ankara - Turkey's capital - issued a warning to American residents and tourists in the country stating the possibility of a terrorist attack "without warning remains a concern," specifically as Turkey marks Ataturk Memorial, Youth and Sports Day on Thursday.

The U.S. embassy also warned that "foreign and U.S. tourists have been explicitly targeted by international and indigenous terrorist organizations in Turkey" and should remain vigilant of demonstrations set for May 22 in the country.

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Walter Bibikow | Getty Images

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