The Director General of PASYXE, Philokypros Roussounides, and the President of the Association of Travel and Tourist Agents (ACΤTA), Charis Papacharalambous, stated that approximately 30,000 tourists who were expected to visit Cyprus are impacted by the bankruptcy filing of the travel provider FTI.
Consequently, around 160 hotels, as well as other businesses such as transport services and travel agencies in Cyprus that collaborated with the Group, are affected.
Roussounides described FTI as a “giant” in the German market and other German-speaking markets, bringing tourists to Cyprus from Germany, as well as from Poland, Switzerland, Austria, and the Netherlands.
“It seems that this year, we were expecting around 30,000 tourists to our island, who would have stayed in 160 different hotels,” he said.
He noted that while the number may not seem large, the development is significant as it adds to the other challenges the industry is facing, referring to the war in Israel, the economic recession in the UK, the upcoming elections in the UK on July 4, the European Championship, and the Olympic Games.
“It’s a year in which the country’s tourism industry will be tested once again, and we hope that it will demonstrate its resilience once more,” he said.
On the other hand, ACTTA President Charis Papacharalambous stated that the development is “clearly negative for the industry,” and any such development creates concern.
“It is clear, however, that the direct impact on the tourism industry will be small, at least in terms of customer arrivals,” he said.
The reasons, he explained, are that firstly, “our numbers from the German market, where this particular organiser mainly operated, are small in proportion to other countries,” citing, as an example, that all German tourists in Cyprus amount to 200,000 annually.
Secondly, he said, there are many travel organisers in Germany, and therefore, in absolute numbers, the figures are small.
When asked about the impact on travel agencies in Cyprus that collaborated with the Group, Papacharalambous replied that the Group also had an office in Cyprus, which is more directly affected.
Additionally, he said that the Group had other partners on the island, beyond hotels, including transport companies and other travel agencies. “There is an issue with outstanding amounts, and that is where the biggest problem lies, especially regarding payments for services that have already been provided,” he noted.
What happens with bookings
Roussounides said that bookings made through the Group are being cancelled. “An effort is being made on German soil by the other two major travel providers to cover part of these trips and to make the journeys for the Germans. This effort has not yet borne fruit. We are also awaiting to see what happens,” he said.
He noted that several hotels are exposed to debts of tens of thousands of euros. Asked if they intend to seek state compensation, he said, “We do not foresee requesting any specific support. We need to focus on the tourism industry, provide incentives and flexibility to businesses. It is not a year in which we should venture into uncharted waters and renegotiate collective agreements, given all these challenges,” he emphasised.
He added that PASYXE is making a last-ditch effort to reach last year’s numbers. “After all, that was also this year’s goal. We hope that the industry will once again demonstrate its resilience, which has sustained us for so many decades.”
Papacharalambous, for his part, said that he believes the vast majority of bookings have already been transferred by third-party collaborators, as part of the Group’s business was not direct to the consumer but from business to business.
“So, in those cases, the responsibility lay with the sellers, and in most cases, arrangements have already been made to change the provider in Cyprus, and there is no issue for those people,” he said.
On the other hand, he added that for direct sales by FTI to consumers from Germany, Switzerland, Austria, and France, these consumers are “clearly covered by the Travel Organiser Insolvency Fund, which exists for these cases.”
He clarified that in Germany, the law provides for a specific fund that ensures consumers who have made down payments or paid for their travel package in full will get their money back, provided they follow a certain procedure.
“I assume that most of them will make new arrangements. It doesn’t mean that these arrangements will necessarily be for Cyprus, as, in the meantime, the pricing policies of airlines and hotels have changed. If they made their reservation last November, it doesn’t mean they will be able to find the same price today,” he said, adding “I think that despite this, the majority will still make new bookings to take the trip as originally planned.”
Booking trends so far
When asked about booking trends so far this year, Roussounides said that there is currently a contraction of around 10% compared to the same period last year. He reiterated that it is a challenging year, and he hopes that there will be no further contraction, although he cannot rule it out, as these negative developments create additional difficulties, not to mention the impact on the prospects of diversifying or further developing this particular market, which is one of the largest in Europe.
He clarified that it is not just the direct impact on bookings and revenue but also the impact on the prospects of the market itself.
Asked about domestic tourism this year, Mr Rousounidis said that the domestic market is performing at satisfactory levels, as has been the case historically, accounting for around 7-8% of the total.
Outbound tourism
Papacharalambous, for his part, said that “the Cypriot continues to travel. We expect that the numbers will be close to last year’s, if not slightly higher.”
He recalled that last year was a record year for travel by permanent residents of Cyprus abroad, and added that in the first four months of 2024, according to the Statistical Service, the trend seems “quite strong” for Cypriots travelling abroad.
Taking the opportunity, he noted that it is good for consumers to consider the experiences arising from the FTI closure and to ensure they book with approved travel organisers, who have insolvency coverage in case of default.
On the other hand, he said, when direct bookings are made, and something goes wrong with any of the companies providing services in the middle, there is no legislation to cover either the airlines or the hotels alone. “Whereas the organiser who offers packages is obliged to be covered,” he said.
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bankruptcy filing of FTI. tourism industry, bankruptcy filing, impact