Germany Slashes Fees and Collateral for National Travel Protection Fund
Key Changes to Germany's Travel Security Fund
Reduction of Fees and Collateral
BERLIN, June 25 (Reuters) - Germany will reduce the cost of protecting package holidays against tour operator insolvency by cutting fees and collateral for its national travel security fund, the country's main travel industry association said on Thursday.
Lower Levies for Travel Operators
• German travel association DRV said levies paid into the German Travel Security Fund (DRSF) will be reduced to 0.25% of protected travel turnover from November 1, down from 0.5%
Impact on Competitiveness
• The association said this step would free up about €70 million ($79.5 million) a year and strengthen the competitiveness of package tours
Collateral Requirements Eased
• DRV said required collateral for the fund will also be lowered, calling it a one-off reduction of about €560 million in security postings, cutting capital costs and the need for bank guarantees or insurance cover
Industry Reactions
TUI's Response
• Tour operator TUI said the move was "a correct interim step," and further reductions should follow quickly
Potential for Further Reductions
• TUI said that with around €1 billion already available to the fund for customer protection a cut to zero was possible without weakening customer protection
Background of the Travel Security Fund
• The government created the fund in 2021 after the collapse of Thomas Cook to guarantee refunds if a tour operator fails
($1 = 0.8803 euros)
(Reporting by Klaus Lauer, writing by Kirsti Knolle, editing by Friederike Heine)
