Hotels in Phuket and across Thailand are facing significant losses as a result of the collapse of Europe’s third-largest tour operator. But the island’s hotel business looks like it is going to be the worst hit.
Germany’s FTI Group filed for insolvency earlier this month, which is affecting thousands of tourists and hundreds of hotels in the kingdom, most of them in Phuket. The Bangkok Post reports that the tour operator’s collapse has led to losses of 111 million baht, maybe more after more information comes to hand.
The president of the Thai Hotels Association says hotels in the South have been hit the hardest, with losses of 92.9 million baht, mostly in Phuket. Bangkok hotels face losses of 12.7 million baht, while hotels in the east of the country are facing losses of around 4 million baht (mostly Pattaya).
Thienprasit Chaiyapatranun adds that the FTI Group was one of the biggest sources of revenue for Thai hotels and these figures could end up higher, as hoteliers continue to submit information to the THA.
Thienprasit says all information submitted to the association is being compiled for talks that will take place with the relevant authorities this week, in the hope of achieving a resolution via the Thai and German governments.
He sees the situation as potentially affecting hotels’ willingness to extend credit to tour operators in the short and medium term, adding that accommodation providers may move to direct online bookings instead.
Meanwhile, the president of the Association of the Chon Buri Tourism Federation says hotels are having to ask FTI guests for advance payment on check-in or payment on check out, as they fear being unable to collect payment from the stricken tour operator.
“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.”
However, reports from a number of hotels indicate that tourists are protesting that they have already paid their tour operator and are not responsible if those payments have not been passed on. This means hotel operators will have to bear these losses, as happened after the collapse of the Thomas Cook travel company in 2019.
SOURCE: Bangkok Post
