Sign up for Simon Calder's free travel emails for expert advice and great deals
Get Simon Calder's travel emails
This week, German travel giant FTI Touristik filed for bankruptcy. It was the third largest tour operator in Europe.
“We regret that we are forced to cancel all travel arrangements booked through FTI Touristik GmbH for departures up until Friday, July 5, 2024,” the company told passengers.
The number of British holidaymakers directly affected – those who had package holidays booked with the dissolved German travel giant – is very small – and what's more, they are covered by the German Travel Protection Fund.
However, two of FTI Group's subsidiaries are “B2B” intermediaries that provide hotels, transfers and excursions to online travel agencies (OTAs).
They are Youtravel.com and Meeting Point International. Both offshoots are in financial limbo until FTI's bankruptcy is resolved.
But for now, British travellers who were unaware that part of their holiday had been booked through a German company will be asked: “Did you book other tourism services, such as excursions or airport transfers, as separate services with FTI?”
“Unfortunately, individual services are not covered by the statutory insurance protection of package tours and therefore are not covered by the German Travel Insurance Fund.”
These are important questions and answers.
I booked a trip to the Mediterranean with a UK online travel agency. Why would my trip be put at risk?
It all depends on how online travel agencies put together their holiday packages. Traditional tour operators (Jet2 Holidays and Tui are the biggest) typically have direct relationships with hotels, bus companies and tour operators across the Mediterranean.
In contrast, OTAs such as Love Holidays and On the Beach often source these elements through intermediaries, known in the accommodation sector as “bed banks.” One of the largest bed banks is Youtravel.com, which describes itself as the “industry's favourite supplier.” The UK-based offshoot of FTI had huge buying power, which allowed it to offer hotel rooms at very favourable rates.
Millions of Brits have probably enjoyed holidays with Youtravel.com, entirely unaware that a German-owned intermediary was involved. But suddenly the company's fate is uncertain.
FTI said Youtravel.com is not bankrupt and is “actively working” towards its future. The company aims to “secure its future without FTI's assistance.”
But some hoteliers across the Mediterranean region are worried they might not be paid by FTI-owned intermediaries. They are demanding cash up front, knowing that the money will eventually be returned to guests, who may not be able to pay.
Youtravel.com said: “We understand that there are situations in which travel destinations require you to pay for accommodation locally. FTI Touristik's failure has caused unprecedented issues in travel destinations. In these cases, we strive to share as much information as possible and help our partners resolve the issue for their valued guests.”
Who is responsible for payment? If you've been sensible and chosen a suitable package holiday where you've booked your flights and accommodation in the same deal, then the responsibility lies with the tour operator (holiday company). The tour operator has a duty to provide the trip you've booked. If one of their suppliers stops working, it's up to them to cover that.
Love Holidays said: “A small proportion of our customers' accommodation arrangements will be affected, however we are honouring bookings with other suppliers and are doing all we can to minimise disruption to holidays.”
“If you're planning on traveling with us soon and have your accommodation booked with Youtravel, don't worry – our teams are working hard to reactivate these bookings so you can travel as normal.”
How do I know if my booking is with Youtravel?
Love Holidays says: “Please check your hotel voucher on your booking confirmation and if your booking is affected, rest assured we are doing all we can to rebook your accommodation and minimise disruption to your holiday.”
The only way to pay again is with a credit card. Who pays the interest?
If you have no choice but to pay again and claim from your travel agent, you should be compensated for the full cost involved.
What about transportation and field trips?
Some transfers and excursions were organised by various incarnations of the FTI Meeting Point brand, which is headquartered in Munich and has various subsidiaries across Europe and the Middle East.
Again, if you are affected, the company's name will be on the voucher for that part of your trip, and they should be working quickly to put alternative arrangements in place.
Will bookings with Jet2 Holidays or Tui be affected?
Though not directly, some of the hotels they use may ultimately be owned by Meeting Point, an FTI subsidiary that owns a range of hotel brands. Both companies have told customers they are working to protect affected vacations.
What is the UK travel industry's view?
Julia Lo Bue Said, chief executive of Advantage Travel Partnership, told The Independent: “The news about FTI is shocking as it is one of Europe's largest travel companies. Given the collapse of Thomas Cook in September 2019, this is a further blow to Germany's travel industry.”
“This will be a difficult time for all affected staff and customers. The FTI situation will not only have a major impact on the German holiday market, but as it is a globally connected industry it will undoubtedly have a knock-on effect on the supply chain across Europe and beyond.
“We are aware that a small number of agency partners have been affected and are keeping them updated as best we can, with many agencies already securing alternative arrangements for affected travellers.
“There's a lot of focus right now on giving alternative leave to those affected, but the issue is price and finding alternative leave at a similar price to what you originally paid.”
Does this increase the likelihood of further collapse?
No. Like Thomas Cook in 2019, FTI had been in financial trouble for some time before the COVID-19 pandemic hit, having been unable to repay a government loan and a bailout from investors failing to materialise.
Generally, when a large company goes bankrupt, other companies thrive.
