Thousands of tourists and hotels in Thailand have been stranded after one of Europe’s largest tour operators suddenly went bankrupt.
A tourism crisis has erupted in Thailand following the collapse of a major tour operator from Germany. Thousands of holidaymakers and hundreds of hotels have been affected by the sudden shutdown of Europe’s third-largest tour operator, FTI Group.
Germany’s FTI Group filed for bankruptcy at a regional court in Munich earlier this month, affecting many Thai holidaymakers who were due to check out this week.
According to preliminary estimates by the Thai Hotels Association, the total losses to the country’s hotels from the German company’s bankruptcy totalled at least 111 million baht (about US$3 million). Resort hotels in south Thailand suffered the most – their losses reached 92.9 million baht. In Bangkok, losses are estimated at 12.7 million, and in the country’s east – 4 million baht.
The actual losses could be even more significant as hotels report losses. FTI Group is one of the largest tour operator partners for Thai hotels targeting the European market.
According to Thai Hotels Association president Thienprasit Chaiyapatranun, the organisation will discuss the situation with the authorities and try to find a solution at the government level through intergovernmental ties with Germany.
The bankruptcy of such a significant player could have long-term consequences. Hotels will become less willing to lend to tour operators or reduce credit lines. Some hotels may even switch to online booking and abandon the credit system to guarantee payment and avoid such risks.
Tourists who have booked rooms through FTI are forced to pay for their accommodation at check-out or advance at check-in, as the tour operator can no longer collect these payments. Usually, tour companies have a 30-day credit period after guests check out to pay the hotels.
"Usually, tour operators have 30 days after guests check out or after receiving a bill from the hotel to make payment. Hotels operate this way based on long-term business relationships as they help generate large volumes of guests for hotels," Thai Hotels Association president Thanet Chaiyapatranun told Thai Hotels.Some guests claim they have already paid the tour operator for rooms and refuse to pay extra hotel fees. In such cases, hotels have to bear the losses alone, as was the case during the collapse of British tour operator Thomas Cook in 2019.
In the popular resort of Samui, the number of affected tourists exceeded a thousand, as FTI was one of the largest partners of local tour operators booking large quotas of rooms on the island for its European clients.
The German travel giant’s bankruptcy was a serious blow to the Thai tourism industry. To overcome the consequences, the two countries’ authorities will need to work together.
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