Around 30.000 are the tourists who would come to Cyprus and are affected by the bankruptcy application of the German travel provider FTI. Consequently, around 160 hotels are affected, as well as other businesses, such as transport services and travel agencies in Cyprus that cooperated with the Group, according to what the General Director of PASYXE, Filokypros Rousounidis and the President of the Association of Travel and Tourism Agents ( ACTTA), Haris Papacharalambous.
Mr. Rousounidis told KYPE that it is a "giant group" in Germany but also in other German-speaking markets, which brought people to Cyprus, apart from Germany, also from Poland, Switzerland, Austria, Holland.
"It seems that this year we expected to bring around 30.000 tourists to our island, who would stay in 160 different hotels," he said.
He noted that the number may not sound large, but pointed out that the development is very important, "because it comes on top of all the other challenges we face," citing the war in Israel, the economic downturn in Great Britain, the elections in 4th of July in Great Britain, in the pan-European championship and in the Olympic Games.
"This is a year in which the country's tourism industry will be tested again and we hope it will once again show its resilience," he said.
For his part, the President of the Association of Travel and Tourism Agents (ACTTA), Haris Papacharalambous, said that the development "is clearly negative for the industry" and any such development creates a concern.
"It is clear, however, that the immediate impact on the tourism industry will be small, at least in terms of customer arrivals," he said. The reasons, he said, are that on the one hand "our numbers from the German market, where this particular organizer was mainly active, are small, by analogy with other countries", mentioning, indicatively, that all German tourists in Cyprus amount to 200.000 annually. A second reason, he said, is that there are many tour operators in Germany, so in absolute numbers, the numbers are small.
Asked how the travel agencies in Cyprus that cooperated with the group are affected, he replied that the group also had an office in Cyprus, which are more directly affected. In addition, he said that the group had other partners on the island, in addition to hotels, transport companies, but also other travel agencies that were cooperating. "There is an issue of outstanding amounts and that is the biggest problem, especially in terms of outstanding payments for services that have already been provided," he said.
What about reservations?
Mr Rousounidis said that the bookings made by the group are cancelled. "An attempt is being made on German soil by the other two major travel providers to cover part of these trips and have the Germans make the trips. This effort has not yet succeeded. We also expect to find out," he said.
He noted that several hotels are exposed by tens of thousands of euros. Asked if they intend to ask for state compensation, he said that "we are not expected to ask for any specific support. To rise above the tourism industry, to give incentives and flexibility to businesses. This is not a year in which we should enter uncharted waters and proceed with the renewal of collective agreements, since there are all these challenges", he underlined.
He added that as PASYXE they are making a last effort to reach the numbers as much as possible to last year. "This was also this year's goal. We hope that the industry, which has supported us for so many decades, will show its resilience."
Mr. Papacharalambous said, in turn, that he believes the vast majority of bookings have either already been transferred by third-party partners, as some of the group's work was not direct-to-consumer, but business-to-business. "So in those cases the sellers were responsible and an arrangement has already been made, in most cases, to diversify the supplier in Cyprus and there is no issue for these people."
On the other hand, he added that for the FTI group's direct sales to consumers from Germany, Switzerland, Austria, France, they "are clearly covered by the Tour Operator Insolvency Fund, which exists for these cases". He explained that in Germany the provisions of the law provide for a specific fund, which ensures that consumers who have given advance payments or paid for their travel package, to get their money back after following a procedure.
“I imagine most of them will make other arrangements. It does not mean that these arrangements will necessarily be for Cyprus, as, in the meantime, the pricing policy of airlines and hotels has changed. If they made their reservation last November, it does not mean that they will be able to find the same price today," he said, to add that "I think that despite everything, the majority will make new reservations to make their trip like had planned at the beginning."
Booking progress to date
Asked about the course of bookings to date, the DG of PASYXE said that today there is a reduction of around 10% compared to the corresponding period last year. He reiterated that it is a year full of challenges and "I hope that there will be no further contraction, but without ruling it out, because these negative developments create other difficulties, in addition to the fact that the prospect of cross-cutting or further development of the specific market, which is one of the largest markets pan-European", he noted, clarifying that it is not only the direct impact on loss of bookings and revenue, but it is also a matter of the perspective of the specific market.
Asked to comment on Cypriot bookings this year, Mr. Rousounidis said that the domestic market is moving at satisfactory levels, as it has been throughout the years, around 7-8% of the total.
Outbound tourism
For his part, Mr. Papacharalambous, when asked about the trips of Cypriots abroad this year, said that "Cypriots continue to travel. We expect that the numbers will be close to last year's, if not a little higher."
He recalled that last year was a record year for the trips of permanent residents of Cyprus abroad, while he added that in the first four months of 2024, based on the data of the Statistical Service, the trend seems "quite strong for the trips of Cypriots abroad".
On the occasion, he noted that it is good that the experiences resulting from the development with the closure of the FTI group should also be taken into account by consumers. "When they buy from approved tour operators, who have their insolvency cover, they are clearly covered."
In contrast, he said, when direct bookings are made and something goes wrong with one of the companies offering service in between, there is no legislation covering either the airlines or the hotels themselves. "While the organizer offering packages has an obligation to be covered," he said.
Pending the contract of employees in the tourism industry
Asked to comment on the non-renewal of the contract for the employees of the tourism industry, the CEO of PASYXE, Mr. Rousounidis, said that, because it is a difficult year with significant challenges, PASYXE proposes to renew the contract for another year, as it is, since the employees were covered both by the implementation of the ATA and by some increases given at the beginning of the year.
"Let's use this time to enter into a process to modernize the contract, renew it, to do something better for the hotel employees themselves, but at the same time give flexibility to the business itself, because they changed the past decades and the way we work and the needs of the industry," he said.
He noted that "we don't think it's right to rush, to make a contract, in the midst of all these challenges and by the end of the year to have an agreement and move on to the new era."
Asked if PASYXE is worried that there is no agreement until today, he said that "we have been trying to discuss it since last November. There was a delay, things did not move at the pace we would expect and would like. I believe that even though we are almost in the middle of the summer season, if there is a rational approach from all sides we can find a mutual solution for the good of all."
Source: KYPE
