How FTI’s insolvency will affect Türkiye’s tourism industry?
FTI, one of Germany’s largest tour operators, has declared bankruptcy, affecting its operations in Türkiye, Egypt and Grecee
FTI, one of Germany’s largest tour operators, has announced its bankruptcy filing, impacting its operations in Türkiye, Egypt, and Greece.
FTI’s management had extensive discussions with German authorities over the weekend regarding the possibility of writing off part of the company’s debt. However, no agreement was reached.
FTI stated that it filed for bankruptcy for all its subsidiaries, except Sonnenklar TV and the German travel agency chain TVG, with the Munich Local Court as of June 3rd.
FTI bankruptcy shakes Greek tourism: Thousands stranded, millions in debt
aFTI’s bankruptcy shakes Greek tourism as thousands are left stranded and hotels face millions in unpaid bills. The tour operator, known for bringing hundreds of thousands of Germans and other visitors to Greece, particularly to destinations like Crete, Rhodes, Kos, and Corfu, is estimated to have around 7,500 visitors currently in Greece, with 4,000 on Crete alone.
Recent months saw FTI struggling financially, exacerbated by the COVID-19 pandemic, but a consortium of investors had stepped in to aid the group. Despite this, signs of trouble were evident, prompting hoteliers to seek alternative arrangements.
Approximately 300 hotels in Greece are owed around €1.8 million by FTI for 2023 bookings. The operator announced its bankruptcy filing, stating efforts to complete ongoing trips but signaling uncertainty for future bookings.
German Economy Ministry considers FTI’s bankruptcy as “tragic”
A support website and hotline were set up for affected customers, while the German Foreign Ministry assured repatriation and support for affected tourists.
FTI’s bankruptcy filing in the Munich regional court on Monday follows a continued decline in bookings despite a recent one-euro buyout proposal. The company, employing 11,000 people worldwide and offering tours to over 40 destinations, faces insolvency amidst mounting debts and sinking orders.
The German Economy Ministry termed the situation “tragic,” yet couldn’t provide further assistance, leaving the fate of FTI and its extensive network of partner agencies in Germany uncertain.
US consortium offer
In April 2024, a consortium led by U.S. firm Certares offered to buy FTI Group for a symbolic price of one euro and an infusion of €125 million in cash. The offer was pending approval from the German competition authority.
Following this offer, FTI reported a continued decline in bookings and insisted on advance payments from some suppliers. To support their ongoing travelers, FTI has set up a helpline and a dedicated website.
Difficulties in replacing FTI function in the Turkish tourism sector
Tourism professionals analyzing the impact of FTI’s bankruptcy on Türkiye highlight the company’s significant role in the market, noting the difficulty in replacing such a major player. They call for organized action within the industry to help the company survive.
Hamit Kuk, Chief Advisor to the President of the Association of Turkish Travel Agencies (TURSAB), noted that FTI has long been in a severe financial crisis, being one of Germany’s top four operators. Kuk emphasized the long-term challenges this poses, given FTI’s specialization in Turkish tourism and its substantial debts to hotels and suppliers in regions like Antalya and the Aegean.
Hakan Saatcioglu, President of the Professional Hotel Managers Association (POYD), highlighted the discussions about FTI’s financial instability at the recent ITB Berlin tourism fair. He stressed the importance of a calm, rational approach, underscoring the need for the sector to work together to mitigate the impact on both current and future bookings.
Saatcioglu also mentioned the importance of learning from past crises, such as the collapse of Thomas Cook, and the potential for positive outcomes if a trustee is appointed for FTI.
