Filenews 4 June 2024
Around 30,000 tourists would come to Cyprus and are affected by the bankruptcy petition of travel provider FTI.
As a result, around 160 hotels and other businesses, such as transport services and travel agencies in Cyprus that cooperated with the Group, are affected, according to what PASYXE's General Manager, Filokypros Roussounidis, and the President of the Association of Travel and Travel Agents (ACTTA), Haris Papacharalambous, stated.
Mr. Roussounides said that it was a "colossus group" in Germany but also in other German-speaking markets, which brought people to Cyprus, apart from Germany and from Poland, Switzerland, Austria and the Netherlands.
"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 in addition to all the other challenges we face", referring to the war in Israel, the economic recession in Great Britain, the July 4 elections in Great Britain, the pan-European championship and the Olympic Games.
"This is a year in which the country's tourism industry will be tested again and we hope that it will once again show its resilience," he said.
For his part, the President of the Association of Travel and Tour Operators (ACTTA), Haris Papacharalambous, said 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 to a small extent, at least in customer arrivals," he said. The reasons, he said, are that on the one hand "our numbers from the German market, where this particular organizer mainly operated, are small, in proportion to other countries", indicatively mentioning 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 and, therefore, in absolute numbers, the numbers are small.
Asked how travel agencies in Cyprus that worked with the group were affected, he replied that the group also had an office in Cyprus, which are most directly affected. In addition, he said that the group had other partners on the island, in addition to hotels, transport companies, and other travel agencies that collaborated. "That's where there's an issue with amounts outstanding, and that's where the biggest problem is, especially when it comes to payments pending for services that have already been offered," he said.
What about reservations?
Mr. Roussounidis said that reservations made by the group are cancelled. "There is an effort on German soil by the other two major travel providers to cover part of these trips and for Germans to make the trips. This effort has not yet succeeded. We are also waiting to find out," he said.
He noted that several hotels are exposed by tens of thousands of euros. Asked if they intended to seek state compensation, he said: "There are no plans to ask for any specific support. To look 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, as long as all these challenges exist," he underlined.
He added that PASYXE is making a last-ditch effort to bring the numbers as far back as possible to last year. "That was also this year's goal. We hope that the industry, which has lasted us for so many decades, will show its resilience."
Mr. Papacharalambous said, in turn, that he considers that the vast majority of bookings have either already been transferred from third-party partners, as part of the group's work was not directly to the consumer, but from business to business. "So in those cases the responsibility lay with the sellers and an arrangement has already been made, in most cases, for diversification of the supplier in Cyprus and there is no question for these people."
On the other hand, he added that for FTI Group's direct sales to consumers from Germany, Switzerland, Austria and France, they "are clearly covered by the Travel Organiser Insolvency Fund, which exists for these cases". He clarified that in Germany the provisions of the law provide for a specific fund, which ensures consumers who have made advance payments or paid for their travel package, so that they 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, since, 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, adding that "I think that despite this, the majority will make new bookings to make their trip as planned in the beginning."
Progress of bookings to date
Asked about the course of bookings so far, the PASYXE DG said that today there is a contraction of around 10% compared to the same 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 excluding it, because these negative developments create other difficulties, plus the prospect of flourishing or further development of this market, which is one of the largest markets in Europe, is certainly difficult", 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 this particular market.
Asked to comment on the bookings of Cypriots this year, Mr. Roussounides said that the internal market is moving at satisfactory levels, as it has been over time, around 7-8% of the total.
Outbound tourism
On his part, Papacharalambous, asked about the trips of Cypriots abroad this year, said that "the Cypriot continues to travel. We expect the numbers to be close to last year's, if not a little higher."
He reminded that last year was a record year for trips abroad by permanent residents of Cyprus, while adding that in the first four months of 2024, based on data from the Statistical Service, the trend seems "quite strong for the trips of Cypriots abroad".
On this occasion, he noted that it is good that the experiences resulting from the development with the closure of the FTI Group are also taken into account by consumers. "When they buy from approved tour operators, who have their cover in case of insolvency, they are clearly covered."
In contrast, he said, when direct bookings are made and something goes wrong with any of the companies offering services in between, there is no legislation that covers either airlines or hotels on their own. "Whereas the organizer offering packages has an obligation to be covered," he said.
The contract of employees in the tourism industry is pending
Asked to comment on the non-renewal, to date, of a contract for employees of the tourism industry, PASYXE DG Mr. Roussounidis said that, because it is a difficult year with significant challenges, PASYXE proposes to renew the contract for another year, as it stands, since the employees were covered by both the implementation of ATA and some increases given at the beginning of the year.
"We should use this time to enter into a process of modernizing the contract, to renew it, to do something better for the hotel employees themselves, but at the same time to give flexibility to the business itself, because the way we work and the needs of the industry have changed in recent decades", Said.
He noted that "we believe that it is not right to rush, to make a contract, in the midst of all these challenges and by the end of the year to have an agreed one and move on to the new era."
Asked if PASYXE was concerned that there was no agreement to date, 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 have expected and wanted. I think 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."
CNA
