FTI sent a letter to its Greek hotel partners, informing them that visitors are legally covered by the German Travel Protection Fund (DRFS), which was posted by the president of the Panhellenic Federation of Hoteliers, Mr. Giannis Xatzis to ex-twitter.
The text of the letter is as follows:
“In light of the news about the bankruptcy filed by FTI Touristik GmbH and the anticipated preparation for BigXtra Touristik GmbH, we would like to inform you that guests who have booked your hotel as part of a travel package are covered by an insurance fund.
As our guests have booked a travel package through FTI, 5vorFlug or BigXtra tour operators, the legal coverage provided by the German Travel Protection Fund (DRFS) applies. In cooperation with the DRFS, we will endeavour to ensure that our guests complete their trip as planned.
We kindly ask that you avoid holding individual guests responsible at your hotel, as each guest will be covered by a cover letter with billing instructions issued by DRFS.
Sincerely
FTI Group”
The repayment of FTI customers’ money is certain
The German Travel Protection Fund (DRSF), which is responsible for securing customer payments in the package travel industry, believes it is well prepared for the major challenge posed by the bankruptcy of FTI.
“In order to settle potential insolvencies of the companies covered by it, the DRSF holds the legally prescribed target capital, which consists of travel agents’ security deposits, payments made and lines of credit,” a DRSF statement said. This means that there is sufficient capital for all crisis scenarios provided for by law, “even for a bankruptcy of the scale of FTI Touristik”.
DRSF does not provide information on the current level of funds. What is clear, however, is that it is significantly higher than the original target of €750 million for 2027, which was reached last autumn.
This is because the legally required target capital has increased significantly due to the strong return of package holidays following the pandemic crisis. According to the DRSF law, the fund must be financially equipped to cover the hypothetical case of simultaneous insolvency of the largest and a medium-sized travel provider.
Despite reports to the contrary, according to which an attempt is being made to return the money to customers within “four to six weeks”, the fund managers are not initially committed for any length of time: “At present it is not possible to estimate the time within which FTI Touristik package holiday customers entitled to a refund can receive their advances back.” However, the DRSF will ensure that payments made will be refunded within its statutory remit.
This will be a real challenge for the fund in view of the large number of reservations affected. The fund will contact affected customers for a refund as soon as FTI provides the necessary information, it said.
In addition, the DRSF is working closely with the affected company and the crisis team of the Federal Ministry of Foreign Affairs in Germany and is in close contact with service providers to assist the affected holidaymakers.
However, full refund of customers’ money does not apply if customers are already on holiday. In this case, at least the coverage of accommodation costs is limited, as shown in a letter from DRSF to the Travel Sales Agency. Accordingly, the reimbursement of the fee agreed between FTI and the hotels is limited to a maximum of EUR 80 per traveller per night. This includes the services to be provided in accordance with the contract if they have not been paid for or only partially paid for by the travel organisation, the trip has not yet ended and the travel services have been provided in full and in accordance with the contract.
However, the full refund of customers’ money does not apply if customers are already on holiday. In this case, at least the coverage of accommodation costs is limited, as is clear from a letter from the DRSF to the Association of German Travel Agents. According to this letter, the reimbursement of the fee agreed between FTI and the hotels is limited to a maximum of EUR 80 per traveller per night. This includes the services to be provided under the contract if they have not been paid for or only partially paid for by the travel agency, the trip has not yet been completed and the travel services have been provided in full and in accordance with the contract.
