The collapse into insolvency of German travel group FTI Touristik on Monday drew a shocked reaction from senior industry figures and concern about the impact on some agents.
Germany’s third-largest operator and one of the top four in Europe, FTI filed for insolvency in Munich following the collapse of a refinancing deal despite announcing significant investment from US private equity firm Certares in April.
The initial filing involved only FTI’s tour operator brand, but the group noted “corresponding applications will be filed for other group companies”, putting the future of UK-based accommodation provider Youtravel in doubt.
More: Youtravel.com cancels week of bookings after parent’s insolvency filing
Owner of Europe’s third largest operator FTI Group files for insolvency
Youtravel cancelled bookings for seven days from June 4 and a spokesperson said: “We’re a separate entity actively working on determining the future course of action without the support of FTI Touristik. We acknowledge this does not offer sufficient clarity to our partners.”
Alistair Rowland, chief executive of Blue Bay Travel, said: “Nobody saw this coming.”
He suggested the fallout in the UK would predominantly affect agents dynamically packaging with Youtravel rooms.
Rowland said: “The problem will be finding alternative accommodation at a similar price. It’s going to be quite a bit more expensive. So, if you have 1,000 bookings it could be a problem.”
Alan Bowen, legal advisor to the Association of Atol Companies, agreed: “This came out of nowhere. It’s not good news for UK agents packaging Youtravel accommodation with flights. They will be responsible [for the packages].”
Julia Lo Bue-Said, chief executive of The Advantage Travel Partnership, said: “We’re shocked at the news. There could be ramifications for UK businesses. A very small number of our members have been impacted and we’re offering our support.”
One trade source conceded: “Youtravel is an important bed bank for lots of us. We’re working with bed bank partners to transfer bookings. [But] it’s difficult to get similar affordable four and five-star hotels.”
Loveholidays, the UK’s third-largest Atol holder, used Youtravel and FTI as accommodation and transfer partners and said “a small portion of customers are affected and we’re working to honour their bookings with alternative providers”.
A spokesperson added: “Some hotels are asking customers in resort to pay for rooms again. Loveholidays has committed to covering these costs and is working with affected customers and the hoteliers. We’ve contacted all customers in resort or due to travel imminently. We’ll remain in touch as the situation progresses.”
A German industry source told Travel Weekly: “FTI had its back to the wall even before Covid.”
The company had failed to repay government-backed pandemic loans and the source said: “The government was willing to write off up to 80% of the loan to get some money back, but that raised questions among other tour operators and airlines.
“Certares wasn’t willing to pay. The government said it couldn’t do more and the deal fell through. FTI filed for insolvency saying bookings had not come in and they didn’t have the money to pay hoteliers. There is hope there might be a plan to save some of the business, but it will be difficult.”