This week a major German travel company, FTI Touristik, collapsed. It was the third largest tour operator in Europe.
The company is telling passengers: “All travel arrangements booked through FTI Touristik GmbH with a departure date up to and including Friday 5 July 2024 must unfortunately be cancelled.”
The number of British holidaymakers directly affected – i.e. having booked packages with the defunct German travel giant – is vanishingly low. In addition, they are covered by the German Travel Security Fund.
But two subsidiaries of the FTI group are ‘business-to-business’ intermediaries offering hotels, transfers and excursions to online travel agencies (OTAs).
They are Youtravel.com and Meeting Point International. Both offshoots are on financial hold while the FTI’s insolvency is resolved.
But for now, British travelers who had no idea that part of their holiday had been booked through a German company are being told: “Have you booked other tourist services as individual services with FTI, such as excursions, airport transfers, etc?
“Unfortunately, individual services are not covered by statutory insurance protection for package holidays and are therefore not covered by the German Travel Security Fund.”
These are the most important questions and answers.
I booked a holiday to the Mediterranean with an online travel agency in Great Britain. How come my trip could be in jeopardy?
It all comes down to the way online travel agencies put together package holidays. Traditional tour operators – of which Jet2 Holidays and Tui are the largest – generally have direct relationships with Mediterranean hotels, bus companies and excursion providers.
In contrast, OTAs such as Love Holidays and On The Beach often source these elements through intermediaries known in the accommodation field as ‘bed banks’. One of the largest bed banks is Youtravel.com, which calls itself “the industry’s favorite supplier.” The British-based offshoot of FTI had enormous purchasing power and was therefore able to offer hotel rooms at very favorable rates.
Millions of Brits have probably enjoyed holidays involving Youtravel.com and were completely unaware that a German-owned intermediary was involved. But suddenly the company’s fate is uncertain.
FTI says Youtravel.com is not insolvent and is “actively working” on its future. The aim is to “secure our future without the support of FTI”.
However, it is understood that some Mediterranean hoteliers are concerned about the prospect that they may not be paid by the FTI-owned intermediary. Because they know the guest will eventually be reimbursed, they ask for cash upfront. But people may not be able to pay.
Youtravel.com says: “We are aware of situations where guests at the destination are asked to pay for their accommodation on site. “The failure of FTI Touristik has resulted in an unprecedented problem in the destination area and in these cases we aim to support where possible by sharing as much information as possible to help our partners resolve the issue for your valued guests.”
Whose responsibility is it to pay? Assuming you did the sensible thing and opted for a good package holiday – with flights and accommodation booked in the same transaction – the responsibility lies with the tour operator (holiday company). She is obliged to deliver the trip you have booked. If one of its suppliers ceases operations, it is up to the company to resolve it.
Love Holidays said: “A very small proportion of our customers’ accommodation arrangements will be affected. However, we work hard to honor these bookings with other suppliers to minimize disruption from any public holidays.
“If you are traveling with us soon and your accommodation is booked through Youtravel, don’t worry. Our team is working to restore these bookings so you can travel normally.”
How do I know if my booking is with Youtravel?
Love Holidays says: “Please check the hotel voucher on your booking confirmation. If your booking is affected, please be assured that we are working hard to rebook your accommodation and minimize any disruption to your holiday.”
I can only afford to pay again if I put it on a credit card. Who pays the interest costs?
If you have no choice but to pay again and declare it to your holiday company, you should receive full reimbursement of the costs.
What about transfers and excursions?
Some transfers and excursions were organized by various incarnations of the FTI Meeting Point brand, headquartered in Munich but with a range of subsidiaries in Europe and the Middle East.
Again, if you are affected, the voucher for that part of your trip must mention the name of the company. If this is the case, your holiday company should urgently organize an alternative.
Does this have consequences for bookings with Jet2 Holidays or Tui?
Not directly, although some of the hotels they use may ultimately be owned by FTI subsidiary Meeting Point, which has a range of hotel brands. Both companies tell customers they are working to protect affected holidays.
What is the view of the UK travel industry?
Julia Lo Bue-Said, CEO of the Advantage Travel Partnership, shared The independent: “We were shocked to see the news from FTI, one of Europe’s largest tour operators, which is another blow to the German travel industry given the collapse of Thomas Cook in September 2019.
“It will be a difficult time for all affected employees and customers and FTI’s situation will undoubtedly not only have a significant impact on the German holiday market, but also have a knock-on effect on the supply chain across Europe and beyond. are a globally connected industry.
“We know of a small number of our agent partners who have been affected and we are keeping them informed of developments as far as we can and with many agents who have already made alternative arrangements for their affected travelers
“There will now be a big focus on securing alternative holidays for those affected, but the issue will be one of price and trying to find alternative holidays at a similar price to that originally paid.”
Does this make further collapses more likely?
No. As with Thomas Cook in 2019, FTI had been experiencing financial difficulties for some time, even before the Covid pandemic. The country was unable to repay government loans and a planned investor rescue deal failed to materialize.
When a major player goes bankrupt, other companies usually flourish.