The Tourism Minister, Jessica de León, describes it as the “inevitable end” and is now charting a new course following the Monday upheaval.
SANTA CRUZ DE TENERIFE, 5th June (EUROPA PRESS) –
The Canary Islands government is preparing a soft loan facility to inject cash flow to local businesses and a strategic marketing campaign in Germany to safeguard airline seat bookings post the collapse of tour operator FTI.
This plan was revealed by the Minister of Tourism and Employment, Jessica de León, after a meeting with representatives from Ashotel, labour unions, island councils, and the German consul in Spain, Ralf Reuter.
De León expressed concerns about potential disruptions in air connectivity to the islands due to blocked seat reservations with airlines like Condor or Germanwings, which could lead to a decline of up to 5% by year-end. Thus, the intensified marketing efforts in Germany aim to sustain the growth of this market, which already matched the seat capacity of 2019 earlier this year.
While confirming that the 1,500 direct employees in the islands have been paid on time so far, the Canarian Employment Service (SCE) is preparing support measures in case layoffs become necessary.
“We are not currently facing that scenario,” she clarified, mentioning that when Thomas Cook, a British tour operator, went bankrupt, two million euros were allocated for intervention.
De León, who has briefed the Secretary of State for Tourism on the situation, emphasized the importance of assuring calmness, pointing out that FTI’s contribution to the islands accounted for just 3% of total tourists and 15% of the German market. Although she acknowledged that the bankruptcy was anticipated, the aftermath brought “widespread panic” on Monday due to the echoes of the Thomas Cook collapse.
She mentioned that around 1,500 tourists have their accommodation and return flights insured by the German fund Der Touristik until June 30. For others, according to Aena, the repatriation process is proceeding smoothly with tourists financing their early return if they choose to.
Concerning incidents involving affected tourists in Fuerteventura, she classified them as “isolated” cases and assured that efforts are underway to find solutions. The hotel division of the parent company, Meeting Point, operates 20 establishments in Gran Canaria, Fuerteventura, Lanzarote, and Tenerife.
The Ministry has estimated a direct economic impact of approximately 2.4 million euros in the islands, with Tenerife bearing around 1.2 million, and Lanzarote and Fuerteventura 600,000 euros each. Further analysis is required to assess the repercussions on service providers who had contracts with FTI, whose operations in the archipelago generated up to 800 million euros last year.
63% of German tourists to the Canary Islands prefer booking packaged tours, with Fuerteventura and Gran Canaria having over 50% and 67% packaged bookings respectively, making them the most affected islands by the FTI bankruptcy.
ASHOTEL Confirms Situation is Under Control
Commenting on potential redundancies, Ashotel’s manager, Juan Pablo González, mentioned that the necessity for restructuring measures like ERE or ERTE has yet to be evaluated. He appreciated the government’s financial assistance and the intervention of the German Travel Insurance Fund to address accommodation expenses post-insolvency.
He expressed confidence in retaining air connectivity and eventually recovering the 300,000 annual tourists that FTI previously catered to. “This provides assurance as historical data shows that these losses are absorbed by other operators over time,” he highlighted.
The German consul acknowledged the crisis, highlighting that it does not parallel the Thomas Cook collapse. Lessons learnt from the past event prompted swift action with a crisis task force activated immediately by the authorities.
He elaborated on ongoing collaboration between the Canary Islands government, insurance funds and other stakeholders to respond to tourist needs, notwithstanding isolated incidents. He optimistically noted, “While some unfortunate events occurred, this crisis is expected to pass quickly, and I believe the vacant spots will soon be filled by other incoming tourists.”
