In early summer 2024, the German travel industry experienced a shock when the third largest tour operator FTI filed for bankruptcy, affecting more than 215.000 package tours.
The bankruptcy led to a massive decline in confidence in the industry and left many travelers at a loss. While more than ten million euros in compensation has already been paid out by the German Travel Insurance Fund (DRSF), many of those entitled to claim have not yet submitted a refund application. This situation raises questions not only about the efficiency of the compensation process, but also about the information policy of the DRSF and the tour operators.
insolvency of the tour operator FTI
The insolvency of the FTI tour operator was an unforeseen event due to a variety of factors, including the ongoing impact of the COVID-19 pandemic on the travel industry, rising operating costs and declining booking numbers.
With the bankruptcy, many travelers lost their already booked trips and thus their investments. FTI had served over 2023 million customers in 2,5, which underlines the significance of the insolvency.
compensation process via the DRSF
To support the affected travelers, the German Travel Insurance Fund (DRSF) stepped in, which serves as a protection mechanism for payments already made in the event of a tour operator's insolvency. Since the start of the reimbursement process on August 8, 2024, the fund has already received more than 125.000 applications. The DRSF announced that more than ten million euros in compensation have been paid out so far and that a mid-double-digit million euro amount will be reimbursed to the affected customers.
"We see that a significant proportion of the consumers contacted have either not yet started processing their refund application or have started but not submitted it," explains Ali Arnaout, Executive Director of the DRSF. This is an alarming sign, as the deadline for submitting applications is the end of 2024 and many travelers may be at risk of losing their claims.
application and communication problems
So far, applications have only been submitted online, which is a hurdle for many consumers who have difficulty with digital processes or do not prefer them. "Our data shows how quickly and efficiently the online application process works for most consumers," says Stefan Mees, the second managing director of the DRSF. Nevertheless, the fund plans to accept paper forms in the near future to meet the needs of less tech-savvy travelers.
A total of 180.000 claimants were contacted. The fact that many of them did not apply could indicate that information about the compensation process was not sufficiently communicated. Confidence in the fund and the travel industry in general could also have an impact on travelers' hesitant response.
Despite the challenges associated with the FTI bankruptcy, the DRSF assures that all those entitled to claim will receive their reimbursement. The fund is already providing important support for travelers who are hoping for clarity and compensation in the uncertain times following the insolvency of the FTI operator.
The insolvency of FTI has not only affected the affected travelers, but also raises fundamental questions about the stability of the travel industry in Germany. The need for greater information dissemination and the implementation of user-friendly application procedures are crucial to regaining consumer trust and avoiding future bankruptcies. At a time when travel is not only a hobby for many people, but also an important lifeline, it is of utmost importance that tour operators and protection mechanisms such as the DRSF work closely together to protect consumers as best as possible.