Thomas Cook threatened by hoteliers with legal action

The tourism sector has been affected by the financial crisis

Hotel owners in Spain are threatening Britain's second largest holiday company with legal action.

Thomas Cook plans to make a unilateral 5% cut on its August and September accommodation invoices for hotels across Europe and the Caribbean.

The cut means all hoteliers who provided accommodation to Thomas Cook's UK customers will get 5% less than the agreed room price.

Thomas Cook said it had been talking to hoteliers to come up with solutions.

Manuel Moncada, from the Hoteliers Association in Benidorm and Costa Blanca (HOSBEC), warned that the association would seek legal advice if the holiday firm went ahead with the plan.

"We cannot possibly accept such an action," he said.

"It is the first time in over 40 years I have been in this business that a company of the size and standard of Thomas Cook has taken such a decision, to unilaterally cut and reduce the cost of something which is already signed and sealed in a contract - and is legally binding for both of us."

'Concerns'

Thomas Cook said the decision was taken to make up for lost earnings following a difficult year in the tourism industry.

It said it had to sell holiday packages at lower than normal prices this summer because fewer people were booking holidays.

The company blamed that on the disruption caused by the volcanic ash cloud from Iceland, the uncertainty surrounding the General Election and emergency budget, the World Cup, and the especially good weather in the UK putting people off travelling.

The Caribbean Hotel and Tourism Association (CHTA) has also said it was rejecting Thomas Cook's move, and was promising a "strong collective stand" against the action.

A spokesperson for Thomas Cook said: "We are delighted by the response we have received from hoteliers in Turkey, Greece, Cyprus, Egypt and our other important holiday destinations.

"In the last few days we have been in contact with hoteliers in Spain and we are encouraged by the majority of feedback we have received.

"Clearly hoteliers were initially concerned, but having entered into dialogue with us we are pleased that, with flexibility on both sides, we are reaching satisfactory results."