Relief in the balearics after tour operator confirms immediate future

The Balearic hotel sector, and tourist industry as a whole, breathed a sigh of relief last night after struggling British tour operator MyTravel announced it will be able to continue trading until the end of next year after reaching a loan agreement with its banks. MyTravel, formerly Airtours, is one of the Balearics' biggest clients bringing over a million tourists each year to the region. It owns a highly coveted portfolio of hotels, including one of the biggest resort complexes in Europe--the Bellevue in Alcudia--and is a large employer. The reprieve comes after Chairman and founder of the tour operator David Crossland took back the reins of the company to try and sort out the mess made by a £50 million black hole in the accounts. Crossland had been due to retire this month. “MyTravel has gone through the worst year in its history,” Chairman David Crossland said. However, Majorcan hotel sector sources said last night that the news that the tour operator will continue functioning as normal at least until the end of next year is “very positive.” However, Crossland said that MyTravel, which includes brands such as Going Places, has lost £72.8m in the year to the end of September. And it has restated its profits for the previous year. Instead of the £81m profit announced in 2001, MyTravel said it actually made only £62m. The company said shareholders would not get a final dividend this year. The group also announced that its finance director David Jardine was leaving immediately along with Richard Carrick, chief executive of the global development division. The company's chief executive, Peter McHugh, said MyTravel would sell some of its operations as part of the plan to reshape its business. In a conference call with reporters he said that a “small business” had been lined up for immediate disposal. But he refused to say if there had been any takeover approaches from other businesses. MyTravel's large competitors are believed to have sized up the tour operator's Balearic accommodation portfolio, described by one as a “golden opportunity.” What makes MyTravel's accommodation contracts so attractive is that because of the building freeze in the Balearics, new accommodation is a premium for tour operators hoping to expand their Balearic operations. Peter McHugh said yesterday “I don't think we need to sell large chunks of the company to survive.” “I think two of the major strengths we enjoy are the loyalty of our customers and the dedication of our employees. These turbulent times have not diminished either,” he added. Mr McHugh insisted the worst was over: “I think that our finances going forward at this point are as strong as anyone's,” good news for the Balearic tourist industry.

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