This week, the large German travel combine FTI Touristik collapsed. It was the third largest travel agency 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 holidaymakers in the UK directly affected – ie with packages booked with the defunct German travel giant – is vanishingly small. In addition, they are covered by the German Travel Security Fund.
However, two subsidiaries of the FTI Group are business-to-business intermediaries that provide hotels, transfers and tours to online travel agencies (OTAs).
They are Youtravel.com and Meeting Point International. Both branches are in financial suspension while FTI’s insolvency is resolved.
But for now, British travelers who had no idea part of their holiday was booked through a German firm were told: “Have you booked other travel services with FTI as individual services such as tours, airport transfers etc.?
“Unfortunately, the individual services are not covered by statutory travel insurance protection and are therefore not covered by the German Travel Security Fund.”
These are the key questions and answers.
I booked a Mediterranean holiday with a British online travel agency. How can my journey be in danger?
It all depends on the way online travel agencies create tours. Traditional tour operators – the largest of which are Jet2 Holidays and Tui – generally have direct relationships with Mediterranean hotels, coach companies and tour operators.
In contrast, OTAs such as Love Holidays and On The Beach often source these elements through intermediaries known in the accommodation industry as ‘bedbanks’. One of the biggest bed banks is Youtravel.com, which calls itself “the shop’s favorite supplier”. The British arm of FTI had enormous purchasing power and was therefore able to offer hotel rooms at very favorable prices.
Millions of Brits have probably enjoyed a holiday that involved Youtravel.com, blissfully unaware that a German middleman was involved. But suddenly the fate of the company is uncertain.
FTI says Youtravel.com is not insolvent and is “actively working” on its future. It aims to “secure our future without FTI support”.
However, some Mediterranean hoteliers are apparently worried about the prospect of not being paid by the FTI-owned intermediary. Knowing that the guest will eventually be reimbursed, they require cash upfront. But people may not be able to pay.
Youtravel.com says: “We are aware of situations where guests at a destination are asked to pay for accommodation on site. “FTI Touristik’s failure resulted in an unprecedented issue at the destination and in these cases we try 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’ve done the sensible thing and chosen the right package holiday – with flights and accommodation booked in the same transaction – the onus is on the travel agent (holiday company). It is obliged to deliver the tour ordered by you. If one of the suppliers suspends operations, the company has to deal with it.
Love Holidays says: “A very small proportion of our customers’ accommodation will be affected. However, we are working hard to honor these bookings with other suppliers to minimize disruption to any public holidays.
“If you are traveling with us soon and your accommodation has been booked through Youtravel, don’t worry. Our team is working to restore these bookings so you can travel as usual.”
How do I know if my booking is through Youtravel?
Love Holidays says: “Please check your hotel voucher to confirm your booking. If this concerns your booking, 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 will pay the interest?
If you have no choice but to pay again and make a claim with your travel agent, you should be fully compensated for the costs involved.
What about transfers and trips?
Some transfers and excursions were organized by various incarnations of the FTI Meeting Point brand, which was based in Munich but had a number of branches throughout Europe and the Middle East.
Again, if this applies to you, the voucher for that part of your journey should have the name of the business. In this case, your holiday company should arrange an alternative as soon as possible.
Are bookings with Jet2 Holidays or Tui affected?
Not directly, although some of the hotels they use may end up being owned by a subsidiary of FTI Meeting Point, which has a number of hotel brands. Both companies tell customers they are working to protect all affected holidays.
What is the outlook for UK tourism?
Julia Lo Bue-Said, CEO of Advantage Travel Partnership, said The Independent: “We were shocked to see the news about FTI, one of Europe’s largest tour operators, which is another blow to the German tourism industry, given the collapse of Thomas Cook in September 2019.
“This will be a difficult time for all affected employees and customers and the FTI situation will undoubtedly not only have a significant impact on the German holiday market, but will also have a ripple effect on the supply chain across Europe and beyond. they are a globally connected industry.
“We are aware of a small number of our agents who have been affected and are keeping them informed of developments as best we can and the many agents who have already made alternative arrangements for their affected passengers.
“There will now be a lot of focus on getting those people to tap into alternative holidays, but the issue will be cost and trying to find an alternative holiday at a similar price to what they originally paid.”
Does this increase the likelihood of further collapses?
No. Like Thomas Cook in 2019, FTI has been in financial trouble for some time, even before the Covid pandemic. It was unable to repay government loans and a planned bailout deal from investors did not materialize.
Generally, if a big player goes out of business, other companies actually prosper.