Tour operator announced. - The travel industry undergoes a restructuring process due to FTI's bankruptcy.
Following the bankruptcy of Europe's third-biggest travel agency, FTI, industry experts predict a shift in the market. "The public will still travel despite the FTI bankruptcy, and the cake worth billions will be divided among other agencies," says tourism expert Torsten Kirstges from Jade University in Wilhelmshaven. Competitors like TUI and DER Touristik might benefit from this situation. In general, the travel industry is doing well.
The first competitors are already making their moves: Europe's largest travel agency, TUI, has announced its intention to expand its offer and is offering discounts and a temporary waiver of deposits to entice customers of the bankrupt competitor. "We will increase our capacities," says a TUI spokesperson. In terms of hotel beds and flight seats, they aim to increase and take over the capacities vacated by the insolvent competitor. "The capacities are now free," adds the spokesperson. Some hotels that were previously under contract with FTI have already contacted TUI.
The industry is working hard to limit the damage
Europe's third-largest travel company filed for bankruptcy at Munich District Court on Monday. This is the biggest setback for the industry since the collapse of Thomas Cook in 2019. "It's crucial that the other providers now rebuild trust," asserts TUI's spokesperson. Unlike Thomas Cook, there is now the German Travel Guarantee Fund, which ensures travelers' losses for packaged tours. Consumers can expect compensation for their tour payments.
Unlike TUI and second-largest competitor DER Touristik, which have already weathered the Corona pandemic and are profiting from Germany's renewed desire to travel, FTI faced bankruptcy. Both companies reported rising booking numbers and growth in revenue and profit in the last financial year. TUI's CEO Sebastian Ebel is optimistic about further investment opportunities. The figures for the summer have already exceeded the previous year's level. "Traveling is still a priority for our customers; it's more stable than we thought," Ebel says.
New customers from FTI could provide an additional boost. "Despite our promising start to the summer, we'll also launch more attractive deals in cooperation with hotels in destination countries over the next few days, especially in places where FTI was particularly strong," says TUI Germany CEO Stefan Baumert. They are targeting countries like Egypt, Turkey, and the UAE.
DER Touristik is also increasing its flight and hotel capacities because of the current circumstances, according to a spokesperson. For former FTI customers booking with DER Touristik, they will also waive deposits.
The industry is back on the fast track
According to experts, the industry is doing well again, despite the debt and bank loans from the Corona crisis. "But there will be a lot of travel, expensive trips are gaining popularity, and cruises are experiencing a renaissance," says Kirstges. TUI, in particular, has announced that its ships are nearly fully booked for the summer. Overall, customers are spending more on holidays.
FTI's model eventually led to its demise. "FTI was more price aggressive and made relatively little per trip with a weak equity base," explains Kirstges. The travel restrictions during the pandemic proved to be the final straw.
The travel restrictions during the pandemic led to significant challenges for the entire industry. TUI and FTI both required government rescues worth billions. Unlike FTI, the publicly traded TUI Group has repaid the state aid with a capital increase. The tourism company DER Touristik, with the financially strong retail group Rewe behind it, managed without state aid. At FTI, they were still in the process of repaying 600 million euros in state aid.
Approximately 65,000 tourists are currently traveling with FTI abroad. "Now it's clear that we've learned the right lessons from the bankruptcy of Thomas Cook in 2019 and have created a realistic instrument called the Travel Guarantee Fund," says Green Bundestag tourism policy spokesman Stefan Schmidt. "I'm optimistic that we'll handle this better than the last major bankruptcy in the tourism industry in 2019."
The German government denied further state aid for FTI on Monday. "From a taxpayer's perspective, it's right that FTI is not bailed out," emphasizes FDP Bundestag member Tim Wagner, who sits on the Tourism Committee. "The company has struggled for a long time." Other travel organizers have managed independently. "The fact that FTI, despite high sales and a good order situation, couldn't recover is also an indication of a questionable concept with a doubtful pricing strategy."
Many FTI tourists are affected in Greece. "According to FTI, there are currently 7,500 tourists in around 250 hotels in the country," reports Yannis Hatzis, President of the Greek Hotel Association, on the platform X (formerly Twitter). Greek media report that FTI owes the hotels payments of around 1.8 million euros. This is a fraction of the unpaid fees from the bankruptcy of Thomas Cook in 2019 when over 200 million euros were still owed to the hotels.
