The owner of Europe’s third-largest tour operator, FTI Group, has filed for insolvency.
FTI Touristik GmbH, whose brands include FTI Touristik and trade-only bed bank Youtravel.com, filed an application for the opening of insolvency proceedings in Munich on Monday.
Initially, only the tour operator brand FTI Touristik is directly affected.
“Subsequently, however, corresponding applications will also be filed for other group companies,” the company said.
FTI added: “After a lengthy and complex investor process, the entry of a consortium of investors was announced in April 2024. Since then, however, booking figures have fallen well short of expectations despite the positive news. In addition, numerous suppliers have insisted on advance payment.
“As a result, there was an increased need for liquidity, which could no longer be bridged until the closing of the investor process. The filing for insolvency has therefore become necessary for legal reasons.”
Giving support to travellers affected by the insolvency has been described as a “top priority” by FTI Group.
A support website has already been set up, as well as a hotline.
The company added: “We are currently working hard to ensure that trips that have already started can be completed as planned. Trips that have not yet begun will probably no longer be possible or only partially possible from Tuesday, June 4, 2024.
“In co-operation with the (provisional) insolvency administrator yet to be appointed, a concept for the ongoing information of affected travellers and the operational implementation of the necessary measures will be developed in the coming days.”
The Munich-based group runs multiple brands, employs more 11,000 people worldwide and generated consolidated sales of around € 4.1 billion in the 2022/23 financial year.
Last month FTI disclosed that its financial position and capital reserves had been “materially strengthened” with the injection of €125 million from a consortium led by US investment firm Certares.
It said that the consortium signed definitive documentation to acquire financial liabilities of FTI following a market-based process, including loans and other financial support.
FTI has offshoots in Austria and Switzerland. French operator FTI Voyages has been part of the FTI Group since 2012 and with FTI Reizen active in the Netherlands since 2016. Seven service centres handle bookings for the group and external customers.
More than 50 properties in eight countries belong to FTI with brands such as Labranda Hotels & Resorts, Design Plus Hotels, Kairaba Hotels & Resorts, Lemon & Soul Hotels, Club Sei as well as Meeting Point managed hotels.
Julia Lo Bue-Said, chief executive of The Advantage Travel Partnership, said: “We’re shocked to see the news about FTI, one of Europe’s largest tour operators, failing after Thomas Cook collapsed in September 2019.
“It will be a difficult day for all affected staff and customers. No doubt it will also have a significant impact not just on the German holiday market but on hoteliers operating in key German source markets such as Spain.”
Morgann Lesné, from investment bank Cambon Partners, a mergers and acquisitions specialist, said: “Most considered FTI too big to fail and therefore would not have seen this coming today.
“Right now a lot of those B2B suppliers will be urgently confirming their exposure and legal situation – they can guess, but it might take days to work through to an absolute figure.
“We shouldn’t count the company out completely though, as it is just possible that a white knight will come in to rescue the company – or even the German government, who stands to lose much with this. Certainly in terms of its strong asset base we’ll quickly see bidders for its extensive business lines.
“Meanwhile competitors of FTI will be conducting speedy analyses to see if they can capture its customer base. Watch out for lots of talk about that publicly via targeted advertising and PR, as well as with investors. Perhaps in the next 24 hours even – things move fast in these situations as there is so much at stake.”