Thai hotels reject TUI’s delayed repayment

Hotels in Thailand have written to TUI Group’s chief executive, rejecting the big tour operator’s proposal to delay debt repayment and proposing an optional deferment payment plan requiring 50% of the overdue amount by this month.

The letter co-signed by 12 tourism associations is addressed to Friedrich Joussen, chief executive at TUI headquarters in Germany, stating that hotels have been affected equally by the pandemic but have kept staff on the payroll to ensure that they will not move away during the crisis, allowing them to return to their jobs immediately once operations restart.

Hotel operators are seeking understanding from TUI Group because the company used accommodation services before the coronavirus outbreak but still insists on holding back funds.

“In reference to your deferment payment proposal, in which you requested the hoteliers sign off on a revised and unfair payment contract, we are unable to accept your proposal,” the statement said. “We found it is against the existing contract rates which you signed in good faith, for credit terms of 30 days, and it is preposterously unfair, coming from a good partner for many years.”

Bhummikitti Ruktaengam, president of the Phuket Tourist Association, said that as TUI’s creditors, hotels have proposed possible solutions to ensure that both sides can continue operating in the upcoming season.

Under the new solution, hotels required TUI to repay 50% of the overdue amount or the total debt to be settled by May 29. Another 50% balance should be paid by Oct 29.

Mr Bhummikitti said TUI Group is not only one of the world’s largest tour operators, but also a long-term partner of Thai tourism operators. As such, hotel operators made sure their counteroffer did not ask for 100% repayment right away.

“Even though we have a close relationship in the past, some hotels may not be tolerant and choose not to work with the group in the future,” he said.

Apart from submitting the letter to TUI Group, the 12 tourism associations, which account for at least 2,000 hotels nationwide partnered with the global tour company, also sent the letter to Prime Minister Prayut Chan-o-cha and top officials at the Tourism and Sports Ministry, the Foreign Affairs Ministry, the Senate Standing Committee on Tourism, the Tourism Authority of Thailand and the German-Thai Chamber of Commerce, asking for help in negotiating with TUI on new repayment terms after failing to reach agreement in previous attempts.

The letter to Gen Prayut said the German government already approved a loan of €1.8 billion to TUI Group to cushion the pandemic impact.