By Humphrey Carter

EUROPE'S second-largest tour operator Thomas Cook last year brought two million holidaymakers to the Balearics and is confident it will break even this year. The tour operator yesterday posted losses for 2002, primarily because of the recessions in Germany and Austria which led to a near ten per cent drop in clients last year. Yesterday Thomas Cook chief executive Stefan Pichler said “2003 isn't going to be a walk in the park, but we're ready for it.” Pichler said that the travel industry is having to respond to the threat of war in Iraq which in turn is making people think twice about travelling. However, with regards to Spain, a total five million holidaymakers booked a Spanish holiday with Thomas Cook last year. Pilcher admitted that it could benefit from a virtual freeze of the Eastern Mediterranean holiday market should war break out with people wishing to holiday closer to home in safe destinations. But he warned that Spain should not take the situation for granted “it needs to continue improving its image and drive to provide better value for money,” he warned, “especially the Balearics, a destination which over the past few years has lost a significant number of foreign visitors in particular Germans,” he added. Pilcher singled out the tourist tax as the main reason for the drop in tourism to Majorca. He said that the decision to introduce the levy “was not very professional,” but he added that the high prices in the Balearics, not just hotel rates, but the service sector, bars and restaurants, even including the price of beach beds, have all had a negative effect. “The Balearic government needs to make tourists feel welcome again by mounting public relations exercises in the region's key feeder markets,” he said. “Tourists will continue swapping their holiday destination from Majorca to Turkey if Balearic holidays remain 20 per cent more expensive than other destinations,” Pichler warned yesterday as he also announced further job cuts as part of the company's cost cutting plan. In this respect, Pichler said that Balearic summer holiday bookings are currently down by 30 to 40 per cent, but the company is confident it will break even, although at the moment, the Canary Islands and Andalucia are attracting most of the attention.