Gambia fears economic crisis after Thomas Cook collapse

Efforts to revive an economy “completely destroyed” by Gambia’s former president, Yahya Jammeh, have been dealt a severe blow by Thomas Cook’s collapse (Photo: Modou S. Joof | TNBES | May 2019).

The collapse of the world’s oldest tour operator has spread fears of an economic crisis among tourism stakeholders and the wider business community in The Gambia.

Thomas Cook Group Plc is the leading global travel company flying in more than 78, 000 holidaymakers to the West African country – 45 percent of the country’s annual tourists arrivals of more than 175, 000.

The Gambian economy relies heavily upon tourism – one of the three biggest contributors to gross domestic product (GDP) and the largest sources of foreign exchange for the country. Agriculture and remittances are the other two sources with the largest shares of GDP.

“The bankruptcy of Thomas Cook will obviously have negative effects on so many businesses and employees in The Gambia,” Alieu Secka, CEO of Gambia Chamber of Commerce and Industry, said.

“All aspects of our society and businesses will feel the results of such a dent because 55% of the service sector [is directly or indirectly dependent on the tourism industry],” he said.

The annual tourism growth is twenty-nine percent in 2019, and accounts for about thirty percent of GDP, according to the government.

Foreign exchange earnings from tourism increased by twenty-three percent – from $104 million in 2017 to $128 million in 2019.

The sector also created direct employment for 41, 800 Gambians – an increase of 6, 800 new jobs from 2017, according to the annual tourism growth report.

The Gambia, a $1 billion economy, relies upon agriculture, tourism and remittances (Photo: Modou S. Joof | TNBES | March 2015)

Fears of GDP Decline

Thomas Cook Group Plc runs hotels, resorts and airlines for 19 million people annually. Its collapse left more than half a million people around the world stranded - in Africa, Asia, Europe, and North America.

There are fears among economic experts that The Gambia’s GDP growth, which is forecast at 5.4%, will see a decline due to the demise of the travel operator.

“The collapse of Thomas Cook is a heavy blow to the Gambian economy considering the fact that tourism is a major contributor to Gambia’s GDP,” Nyang Njie, an economist with the consultancy firm Knowledge Bank Consortium Gambia Ltd, said. “The GDP figures maybe revised downwards because of Thomas Cook’s absence, the tourism sector will suffer significantly.”

Njie said The Gambia doesn’t have time to adjust because the tourism season is starting [on October 15]. “By February, other operators may begin to fill in [the gap]… but this will not make up for the loss of Thomas Cook in the market,” he said.

The British global travel group announced it has ceased operations on September 23 after it failed to secure a deal with its lenders or a bailout by the British government. The company, whose holiday services started 178 years ago, has been battling to stay afloat due to high level debts.

Tough Time

Thomas Cook’s main partner in The Gambia, Gam Tours, has refused to comment on the crisis. The ground tour operator has an average market share of 71 percent in the tour operations business, according to a 2018 tourism market study by the Gambia Competition and Consumer Protection Commission.

A “tough time” awaits hotels and workers in the tourism industry, Malleh Sallah, Manager of Tamala Hotel, told West Coast Radio 2 on Tuesday. “The impact will affect the Gambian people and the economy.”

The Tamala is a local hotel partner to Thomas Cook, and receives guest exclusively brought in by the now demised tour operator.

There is huge uncertainty among the major players in the tourism industry as to how things will pan out.

“The question here is how fast [would another tour operator be able to fill the void left by Thomas Cook] because we are three weeks away from the beginning of the tourism season,” Sallah said.

With uninterrupted sunshine year-round, Gambia offers other attractions such as long sandy beaches, bird watching, dolphin watching, sport fishing, sky diving and mangrove exploration. Tourists also visit historic slave sites.

A Bird Watcher's Paradise: The grey-headed gull is one of 500 bird species found in The Gambia, a small country with a small economy dependent on tourism facing a potential financial crisis over Thomas Cook’s collapse (Photo: Modou S. Joof | TNBES | April 2019).

Stiff Competition

In the last 14 years, the country has seen an increase of more than sixty-seven thousand air arrivals from the 2005 figures of 107, 906, according to a 2016 tourism statistics report published by the Gambia Bureau of Statistics.

Before the demise of Thomas Cook, Gambia’s Ministry of Tourism and Culture said its ultimate focus was to increase tourist arrivals to 500, 000 from the current 175, 000 by next year.

The former British colony is a popular destination for tourists, especially from the United Kingdom, who are trying to escape the extremely cold weathers of Europe between November and February.

However, there are fears other countries will take advantage of the gap left by Thomas Cook to attract Gambia’s tourists to their countries. The Gambia faces stiff competition in the tourism sector in West Africa.

Neighbouring Senegal, for example, has up to one million annual tourist visits, and Cabo Verde has up to half a million annual visits.

Sallah said the government has to take the necessary measures to fix this problem.

“We don’t have a choice, tourism contributes more than 25 percent to the Gambian economy,” he said. “The figures from last year were very impressive and we were expecting a better [season] this year.”

Fort Bullen, an anti-slavery fortress built by the British in 1826, is a national monument, and a popular UNESCO World Heritage Site frequented by tourists visiting The Gambia (Photo: Modou S. Joof | TNBES | June 2019)

Shocked and Saddened

After more than 20 years of operations in The Gambia, Thomas Cook’s collapse forced the government to hold emergency meetings with tourism stakeholders, donors and lenders including the EU, IMF, and the World Bank.

“The government is shocked and saddened by the devastating news of Thomas Cook’s collapse,” the ministry of information said in a statement Thursday.

It said an emergency response team has been formed to mitigate the shock on the job market and the impact on the overall economic situation.

Listed among heavily indebted poor countries, The Gambia is the smallest in mainland Africa with a land size of 10,380 kilometer square. Nearly half of its 2.3 million inhabitants are living on less than $1.25 (62.5 dalasi) a day.

Written by Modou S. Joof

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