TUI boss Ebel: Travel insurance should reduce costs for holidaymakers!

TUI boss Ebel: Travel insurance should reduce costs for holidaymakers!

The travel industry is under pressure, and TUI in particular is currently focusing on its challenges. TUI boss Sebastian Ebel expresses his concerns on LinkedIn about the financial burdens caused by the German Travel Insurance Fund (DRSF). This fund, which serves to protect travelers in the event of trip cancellations, was launched after the bankruptcy of Thomas Cook in 2019 and during the corona pandemic.

The money for the fund comes primarily from large travel providers such as TUI. However, Ebel criticizes the principle of the DRSF because TUI still has to pay in a percentage of its sales despite a healthy fund. Ebel estimates this payment to be in the mid double-digit million range per year, which not only affects pricing for consumers but also inhibits investments. This caused, as Ebel notes, “seven expensive months” after the break of the traffic light coalition, during which the industry experienced a standstill.

demands on politics

Tour operators have been demanding that payments to the DRSF be suspended for some time. Ebel suggests that the obligation to make deposits should be discontinued from July 1st as the fund's target assets have been reached. The DRSF is intended to support affected travel customers in emergencies, such as the insolvency of FTI in 2024. This insolvency caused 332 million euros in total damage, of which 114.8 million euros were borne by the fund.

Ebel is receiving support with his call to suspend deposits. Christoph Debus, the boss of Dertour, sees the political situation as an appropriate time to review the DRSF. Marija Linnhoff, chairwoman of the travel agency association VUSR, also praises Ebel's clear position and his persistence. Ebel emphasizes the need for a proactive approach to the DRSF's pay levels, as no progress has been made since the break of the traffic light coalition.

Transparency and freedom of choice for customers

Ebel is not only calling for a temporary suspension of payments, but also for a long-term change. He suggests offering customers more choice when it comes to insurance so as not to unnecessarily increase the cost of package holidays. This requirement aims to increase transparency with regard to the return investment of the fund's assets and ultimately reduce the burden on consumers. TUI remains under pressure to regain the trust of travelers and the industry.

In January 2023, the fund volume was 836 million euros, but fell to 778 million euros by March 2023. The statutory target capital of the DRSF is 1.04 billion euros, whereby 25 percent of the loan commitments from banks may be taken into account. Ebel criticizes the passivity of the fund management and makes it clear that not everyone affected by the FTI insolvency has already received money back. The industry therefore has a lot to do to increase traveler confidence while at the same time mastering the economic challenges.

For more information on this topic you can read the articles from News38 and FAZ read.