Europe’s third-largest tour operator has announced it is filing for insolvency, casting doubt over the future of two associated companies based in Malta.
On Monday, European tour giant FTI Touristik announced it was filing for insolvency citing low booking numbers and payment obligations, with other companies linked to the operator due to take the same action “in the coming days”.
FTI Touristik is the parent company of FTI Group, which employs 11,000 people worldwide.
It is affiliated with two companies in Malta; its subsidiaries FTIAS Limited and Meeting Point Malta, which employ more than 110 people in their SmartCity offices.
It also operates the Labranda Riviera Hotel & Spa in Mellieħa.
While neither FTIAS Limited nor Labranda has yet provided an official statement on the development, as of Tuesday afternoon the website for the Labranda hotel was no longer reachable.
However, Times of Malta understands FTIAS is currently in negotiations with its parent company in a bid to secure jobs, according to industry sources.
On Monday, Munich-based FTI Touristik, the parent company of FTI Group, announced it was filing for insolvency, warning other companies in the group would also be affected.
In a statement posted to its website, the company said that while the insolvency would only initially affect the parent company, “corresponding applications will also be filed for other Group companies.”
It said that despite bringing new investors on board in April, “booking figures have fallen well short of expectations… In addition, numerous suppliers have insisted on advance payment.”
The company said that because of the drop in sales and its financial obligations, “there was an increased need for liquidity, which could no longer be bridged until the closing of the investor process. The filing for insolvency has therefore become necessary for legal reasons.”
It said it was “working hard” to make sure planned trips went ahead, while those that had not begun would “probably no longer be possible or only partially possible from Tuesday”.
The company stressed that looking after affected travellers was a “top priority” for the group.
Maltese companies
In Malta, FTI Touristik is represented by FTIA Limited, which carries out supporting, or ‘back-office’ services for FTI Touristik including financial services.
Based at SmartCity in Kalkara, the company employs around 110 staff members and has been in business since 2012.
The office is also home to Meeting Point Malta, a brand that operates as FTI Group’s destination management company.
The Labranda Riviera Hotel & Spa, meanwhile, forms part of the Labranda Hotels & Resorts chain of 30 hotels across Europe and Africa.
While Vassallo Group is part of API which owns the site of the hotel, it is not involved in its operation, a spokesperson for the company said when contacted.
When Times of Malta called the hotel on Tuesday morning, staff said it was still open.
When FTIAS and Meeting Point Malta moved to SmartCity in 2014, the tour operator was described as being responsible for bringing the largest number of holidaymakers to the Maltese islands from Germany, Austria and Switzerland.
But Tony Zahra from the Malta Hotels and Restaurants Association, said their market share has since decreased as other operators have come into the market.
“The impact on the local market will be minimal given that this is still the start of the peak season,” he said.
Echoing Zahra’s words, Chamber of SMEs deputy president Philip Fenech said while FTI had been the “biggest tour operator” active in Malta during the 1990s and early 2000s, the tour operator’s operations had become “minimal” since then.
That contrasts with the Cyprus’ hoteliers association, which warned that the insolvency could affect up to 30,000 hotel bookings on the island, while Greek tourism authorities said around 300 hotels in Greece were owed €1.8 million by FTI Group from last year, according to local media reports.
Responding to the news, Germany’s Economy Ministry called the development “tragic” but that it would not be able to provide financial aid to the beleaguered company, while the country’s Foreign Ministry said it would provide consular support if needed, according to Reuters.
And while news of the insolvency has caused shockwaves across Europe, according to one informed local source the company’s collapse had been “a long time coming”, adding Malta’s hospitality sector was “big enough to absorb any losses” should the Labranda hotel shut down.
Questions were sent to FTIAS Limited on Tuesday morning. Times of Malta attempted to reach Labranda hotel for comment.
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