Germany’s FTI Collapse as Losses Exceed 111M Baht in Thailand

Germany’s FTI collapse impacts thousands of tourists and hundreds of hotels in Thailand, resulting in losses exceeding 111 million baht, notably in Phuket and Pattaya.

The collapse of the third-largest tour operator in Europe, FTI, has started to affect thousands of tourists and hundreds of hotels in Thailand, leading to losses of 111 million baht.

Germany-based FTI Group filed for insolvency in the Munich regional court earlier this month, affecting a number of holidaymakers in Thailand this week as they are scheduled to check out.

Thienprasit Chaiyapatranun, president of the Thai Hotels Association (THA), said that based on the group’s preliminary survey on Wednesday, the cumulative impact from this collapse amounted to at least 111 million baht, with hotels in the South losing 92.9 million, lodgings in Bangkok 12.7 million, and the eastern region 4 million (mostly Pattaya).

He said the losses might be greater as hotels continue to submit more information to the association, as FTI was considered one of the biggest feeders for all hotels across Thailand that target European tourists.

Customer payments for rooms booked through FTI are insured by the German Travel Security Fund (GTSF).

He said the recent financial problems with large tour operators would impact the market both in the short and long term, as hoteliers might be reluctant to provide credits to tour operators, or may reduce their credits.

Some hotels may even pivot to online bookings and scrap the credit system to ensure payment and avoid such risks, said Mr Thienprasit.

Thanet Supornsahasrungsi, president of the Association of the Chonburi Tourism Federation, said hotels need to ask their guests who booked rooms via FTI to pay on their own upon checking out, or ask for advance payments upon checking in, as operators might not be able to collect those payments from FTI anymore.

“Typically tour operators would have a credit duration of 30 days after guests check out or after receiving invoices from hotels to make payments. Hotels work on this principle, based on a long-term trade relationship, as they helped generate large volumes of guests for hotels,” said Mr Thanet.

He said there were reports from other hotels that tourists said they were not responsible for their expenses as they already paid lodging fees to the tour company.

In such cases, hoteliers have to bear those costs alone, similar to the collapse of the travel firm Thomas Cook in 2019. THA sees the situation as potentially affecting hotels’ willingness to extend credit to tour operators in the short and medium term, adding that accommodation providers may move to direct online bookings instead.

Seni Phuwasetthawon, vice-president of the Surat Thani Chamber of Commerce, said the number of affected tourists in Samui exceeded a thousand as FTI was one of the largest partners working with operators on the island, allotting a bulk of hotel rooms there for its guests across Europe, not only in Germany.

Hotels in Phuket and across Thailand are facing significant losses as a result of the collapse of Europe’s third-largest tour operator. But the island’s hotel business looks like it is going to be the worst hit which is affecting thousands of tourists and hundreds of hotels in the kingdom, most of them in Phuket.

Meanwhile, the president of the Association of the Chon Buri Tourism Federation says hotels are having to ask FTI guests for advance payment on check-in or payment on check out, as they fear being unable to collect payment from the stricken tour operator. Reports from a number of hotels indicate that tourists are, not surprisingly, protesting that they have already paid their tour operator and are not responsible if those payments have not been passed on.

Andrew J Wood

Andrew J Wood was born in Yorkshire England, he is a former hotelier, Skalleague and travel writer. Andrew has 48 years of hospitality and travel experience. Educated at Batley Grammar School and a hotel graduate of Napier University, Edinburgh. Andrew started his career in London, working with various hotels. His first posting overseas was with Hilton International, in Paris, and he later arrived in Asia in 1991 on Bangkok with his appointment as Director of Marketing at the Shangri-La Hotel and has remained in Thailand ever since. Andrew has also worked with the Royal Garden Resort Group now Anantara (Vice President) and the Landmark Group of Hotels (Vice President of Sales and Marketing). Latterly he has been the General Manager at the Royal Cliff Group of Hotels in Pattaya and the Chaophya Park Hotel Bangkok & Resorts.

A past board member and Director of Skål International (SI), a former National President with SI Thailand and a two time past President of the Bangkok Club. Andrew is the former President of Skål Asia. In 2019, Andrew was awarded SKÅL’s highest award the distinction of Membre D’Honneur.

He is a regular guest lecturer at various Universities in Asia.

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