Thai hotels hit by collapse of German firm
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Thai hotels hit by collapse of German firm

FTI insolvency estimated to have resulted in losses of B111 million so far in Thailand

Tourists relax on a beach at Koh Phangan in Surat Thani. (Photo: Supapong Chaolan)
Tourists relax on a beach at Koh Phangan in Surat Thani. (Photo: Supapong Chaolan)

The collapse of the third-largest tour operator in Europe has started to affect thousands of tourists and hundreds of hotels in Thailand, leading to losses of 111 million baht.

Germany-based FTI Group filed for insolvency in the Munich regional court earlier this month, affecting a number of holidaymakers in Thailand this week as they are scheduled to check out.

Thienprasit Chaiyapatranun, president of the Thai Hotels Association (THA), said that based on the group's preliminary survey on Wednesday, the cumulative impact from this collapse amounted to at least 111 million baht, with hotels in the South losing 92.9 million, lodgings in Bangkok 12.7 million, and the eastern region 4 million.

He said the losses might be greater as hotels are continuing to submit more information to the association, as FTI was considered one of the biggest feeders for all hotels across Thailand that target European markets.

Mr Thienprasit said THA would collate the information for discussion with related authorities this week, seeking solutions through government-to-government ties.

He said the recent financial problems with large tour operators would impact the market both in the short and long term, as hoteliers might be reluctant to provide credits to tour operators, or may reduce their credits.

Some hotels may even pivot to online bookings and scrap the credit system to ensure payment and avoid such risks, said Mr Thienprasit.

Thanet Supornsahasrungsi, president of the Association of the Chonburi Tourism Federation, said hotels need to ask their guests who booked rooms via FTI to pay on their own upon checking out, or ask for advance payments upon checking in, as operators might not be able to collect those payments from FTI anymore.

“Typically tour operators would have a credit duration of 30 days after guests check out or after receiving invoices from hotels to make payments. Hotels work on this principle, based on a long-term trade relationship, as they helped generate large volumes of guests for hotels,” said Mr Thanet.

He said there were reports from other hotels that tourists said they were not responsible for their expenses as they already paid lodging fees to the tour company.

In such cases, hoteliers have to bear those costs alone, similar to the collapse of the travel firm Thomas Cook in 2019.

Seni Phuwasetthawon, vice-president of the Surat Thani Chamber of Commerce, said the number of affected tourists in Samui exceeded a thousand as FTI was one of the largest partners working with operators on the island, allotting a bulk of hotel rooms there for its guests across Europe, not only in Germany.

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