Holidaymakers asked to pay twice for hotels following collapse of German travel firm

This week, a big German travel combine, FTI Touristik, collapsed. It was the third-largest tour operator in Europe.

The company is telling passengers: “All travel arrangements booked via FTI Touristik GmbH with a departure date up to and including Friday, 5 July 2024, unfortunately have to be cancelled.”

The number of UK holidaymakers directly affected – ie having packages booked with the defunct German travel giant – is vanishingly low. Furthermore, they are covered by the German Travel Security Fund.

But two subsidiaries of the FTI group are “business-to-business” middlemen that provide hotels, transfers and excursions to online travel agents (OTAs).

They are Youtravel.com and Meeting Point International. Both offshoots are in financial suspended animation while the FTI insolvency is sorted out.

For now, though, British travellers who had no idea part of their holiday was booked through a German firm are told: “Have you booked other touristic services as individual services with FTI, such as excursions, airport transfers, etc.?

“Unfortunately, individual services do not fall under the statutory insurance protection for package tours and are therefore not covered by the German Travel Security Fund.”

These are the key questions and answers.

I booked a Mediterranean holiday with a UK online travel agent. How come my trip could be in peril?

It all comes down to the way that online travel agents construct package holidays. Traditional tour operators – of which Jet2 Holidays and Tui are the largest – generally have direct relationships with Mediterranean hotels, bus companies and excursion providers.

In contrast, OTAs such as Love Holidays and On The Beach often source these elements through intermediaries that, in the realm of accommodation, are known as “bed banks”. One of the biggest bed banks is Youtravel.com, which calls itself “the trade’s favourite supplier”. The UK-based offshoot of FTI had immense buying power and was therefore able to offer hotel rooms at very favourable rates.

Millions of Brits have probably enjoyed holidays that have involved Youtravel.com and been blissfully unaware that a German-owned middleman was involved. But suddenly, the fate of the company is uncertain.

FTI says Youtravel.com is not insolvent and is “working actively” on its future. It aims to “secure our future without the support of FTI”.

Evidently, though, some Mediterranean hoteliers are alarmed at the prospect that they may not get paid by the FTI-owned intermediary. Knowing that the guest will ultimately be reimbursed, they are asking for cash up front. But people may not be able to pay.

Youtravel.com says: “We are aware of situations where guests in destination are being asked to pay for their accommodation locally. “The FTI Touristik failure has resulted in an unprecedented issue in destination and in these instances, we are trying to support where possible by sharing as much information as we can to help our partners resolve the issue for your valued guests.”

Whose responsibility is it to pay? Assuming you did the sensible thing and chose a proper package holiday – with flights and accommodation booked in the same transaction – the responsibility rests with the tour operator (holiday company). It is obliged to deliver the trip you booked. If one of its suppliers suspends operations, that is the for the company to sort out.

Love Holidays says: “A very small portion of our customers’ accommodation arrangements will be affected. However, we’re working hard to honour these bookings with other suppliers to minimise disruption to any holidays.

“If you’re travelling with us soon and your accommodation was booked through Youtravel, please don’t worry. Our team is working on reinstating these bookings so you can travel as normal.”

How can I tell if my booking is with Youtravel?

Love Holidays says: “Please check the hotel voucher on your booking confirmation. If your booking is affected, please rest assured we’re working hard to rebook your accommodation and minimise any disruption to your holiday.”

I can only afford to pay again if I put it on a credit card – who will pay the interest charges?

If you have no choice but to pay again and claim from your holiday company, you should be indemnified in full for the costs involved.

What about transfers and excursions?

Some transfers and excursions were organised by various incarnations of the FTI Meeting Point brand, which was headquartered in Munich but had a range of subsidiaries across Europe and the Middle East.

Again, if you are affected, the voucher for that part of your trip should name the firm. If this is the case, your holiday company should be urgently organising an alternative.

Are bookings with Jet2 Holidays or Tui affected?

Not directly, though some of the hotels they use may be ultimately owned by FTI subsidiary Meeting Point, which has a range of hotel brands. Both firms are telling customers that they are working to protect any affected holidays.

What’s the view of the UK travel industry?

Julia Lo Bue-Said, chief executive of the Advantage Travel Partnership, told The Independent: “We were shocked to see the news of FTI, one of Europe’s largest tour operators, which is a further blow to the German travel industry, given the Thomas Cook collapse in September 2019.

“It will be a difficult time for all affected staff and customers and no doubt, FTI’s situation will not only have a significant impact on the German holiday market but also have a knock-on impact on the supply chain across Europe and beyond, as we are a globally connected industry.

“We know of a small number of our agent partners who have been impacted and we are keeping them updated with developments as far as we can and with many agents having already secured alternative arrangements for their impacted travellers

“There will be a lot of attention now on getting those impacted on alternative holidays, however, the issue will be one of price and trying to find alternative holidays at a similar price originally paid.”

Does this make further collapses more likely?

No. As with the Thomas Cook in 2019, FTI had been having financial difficulties for some time, even before the Covid pandemic. It was unable to repay government loans, and a planned rescue deal from investors did not materialise.

Generally, if a large player goes out of business, other companies actually prosper.