TUI boss Ebel calls for reform: travel costs are threatening to explode!

TUI boss Ebel calls for reform: travel costs are threatening to explode!

The German Travel Insurance Fund (DRSF) is the focus of criticism from Sebastian Ebel, the CEO of TUI. According to recent reports from news38.de This fund places a considerable burden on tour operators. The DRSF was introduced after the bankruptcy of Thomas Cook in 2019 and the corona pandemic to protect travelers in the event of a trip being canceled.

Ebel criticizes the principle of the fund because large travel providers such as TUI have to continuously pay into the DRSF. Despite the fund's full coffers, he sees the need for TUI to contribute one percent of its turnover every year. This adds up to a mid-double-digit million amount, which, in his opinion, affects the competitiveness of package holidays and is ultimately passed on to consumers.

Criticism of the DRSF and suggestions for reform

During the annual meeting of the travel agency cooperation Best in Kyllini in Greece, Ebel said that he was calling for payments to the DRSF to be suspended in order to maintain the attractiveness of package tours. He described the package tour as an “export hit” and emphasized that high costs and over-regulation pose a threat to its status in Germany.

Ebel estimates the price disadvantage for package tours to be three to five percent due to bureaucratic requirements. In order to improve this situation, he sees the need to reduce the burden on operators and avoid additional obligations as part of the package travel directive reform. He appeals to tourist associations to work to reduce DRSF contributions.

Expansion plans and competitiveness

Additionally, TUI plans to expand into new source markets in South America and Asia, where the growth of the tourism sector is stronger than in Europe. As part of this expansion, dynamically packaged package tours are to be offered via a central platform. Ebel sees this as essential to ensure competitiveness and promote the popularity of package tours in Germany.

To date, TUI has deposited nine percent of its package holiday sales as security in the DRSF and also pays one percent as an annual contribution. Ebel is convinced that the fund volume is large enough to be able to waive the annual contribution in the future. He also rejects speculation about different opinions that led to TUI's withdrawal from the German Travel Association as "bullshit", which illustrates a clear positioning in the industry.

To address the challenges, TUI regularly engages with policymakers in Brussels and Berlin to lobby and effect change. In this context, Ebel appeals to view the introduction of an insurance requirement for individual services as less important and to focus on practical solutions to relieve the burden on organizers. A new approach to travel customer money protection could be a tiered model that allows customers to decide for themselves what protection they need.

The situation surrounding the DRSF remains exciting, as it directly affects not only tour operators but also consumers.