Greek tourism faces uncertainty as Germany's third-largest travel agency, FTI Group, filed for creditor protection on Monday, invoking provisions of German bankruptcy law. The move comes at a crucial juncture as Greece gears up for the main summer season.
FTI Group is a significant player in the tourism sector, bringing hundreds of thousands of German and international travellers to popular Greek destinations, including Crete, Rhodes, Kos, and Corfu. While holiday packages executed during the previous year were largely paid for, recent financial challenges prompted the filing for creditor protection.
According to sources, signs of financial strain within FTI Group have been evident for the past two months, prompting concerns among hoteliers and tourism stakeholders. The entry of the Centares investment fund aimed to alleviate the impact of the coronavirus crisis on FTI Group's operations, but challenges persisted.
Former president of the Hellenic Federation of Hoteliers, Grigoris Tassios, expressed that the sudden development gives an opportunity for other travel agencies and direct sales platforms to step in and fill the void left by FTI. However, concerns linger about the long-term implications, particularly regarding the bargaining power of Greek hoteliers vis-à-vis remaining industry players such as TUI and DER Touristik.
FTI Group issued a statement reassuring customers that ongoing journeys would be completed as planned, while excursions yet to begin may face cancellations. Efforts are underway to ensure a smooth conclusion for travellers currently on vacation, with a customer service hotline established for assistance.
The German Travel Insurance Fund, established post-Thomas Cook's bankruptcy, will handle refunds for canceled packages. Negotiations between American investors, FTI executives, and creditors, including the German government, failed to yield a resolution, leading to the decision to seek protection under German bankruptcy law.
FTI had previously received substantial aid from the German state fund WSF and a loan guaranteed by the German government and Bavaria. The involvement of Centares investment fund and ongoing examination by German competition authorities added complexity to the situation, prompting the move to seek creditor protection.
The filing casts a shadow over Greek tourism, raising concerns about the industry's resilience amidst ongoing challenges and the potential impact on hoteliers and local economies.
(Source: Kathimerini)