• Germany's news in English
 
app_header_v3

TUI asks Greek hotels to promise to take drachma in the worst case

The Local · 5 Nov 2011, 12:20

Published: 05 Nov 2011 12:20 GMT+01:00

German daily Bild said on Saturday it had obtained a copy of a letter and contract from TUI to hoteliers, reserving the right to pay in the new currency, should Greece drop the euro.

A spokesman for the travel operator, Robin Zimmermann, confirmed the report.

"We have to protect ourselves against these kinds of currency risks," he told Bild. "There is more than a theoretical possibility that Greece will leave the eurozone."

Experts say that a new Greek currency could lose up to 60 percent of its value shortly after it is introduced.

The board chairman of the Association of Greek Tourism Enterprises (SETE), Andreas Andreadis, told the paper that a number of hotel owners in Greece had received the letter from TUI requesting them to sign a new contract.

"No hotelier is going to do that, and we have appealed to the Greek tourism ministry," he said. "TUI cannot pressure any hoteliers into signing something like this."

The notion that Athens could default on its debt has raised fears of a domino effect that could shake other debt-burdened eurozone members, such as Italy.

Story continues below…

As the crisis continues to weigh on financial markets, speculation that Greece could leave the eurozone and revert to its former currency, the drachma, is growing.

The Local/arp

The Local (news@thelocal.de)

Your comments about this article

13:49 November 5, 2011 by Lachner
What did the Greeks expect? They want to turn their back on the EU, drop the Euro currency and default their debts, but still continue to enjoy all the benefits of the EU? Get a grip! If they leave the EU and drop the Euro, they will be paid in their own currency which will be devalued by 60%. If they don't sign the contract, then I'm sure that Hotels in Spain, Portugal, Italy, Turkey, the Caribbean and Latin America will welcome the new business and influx of wealthy Germans.
13:55 November 5, 2011 by pepsionice
Here's my Greek response.....say "sure", and say that you'd like to include the acceptance of German "lira" (don't even say Deutsch-Marks). When the German gets all upset and angry.....tell him that it's ok if was German Reich-marks as well. I'm guessing whatever relationship you had with the German....is pretty much gone by that point.

My guess....for 2012....don't expect many Germans in Greece.

Oh, and maybe Germans should calculate up what life would be like if you had to suddenly return to the old D-marks. It might interesting to discuss this potential return.
17:04 November 5, 2011 by Eastard
@pepsionmice

There are major differences between the instances you use and today... The Greeks are blowing off deliberate abuse of monetary management causing OTHERS to loose allot off money... Even amidst OTHERS trying to help the Greeks they protest against change... It is 100% sure that the world is not obligated to fund the Greek lifestyle in anyones currency ... existing or past. As I recall from recent readings in the Athens Times... many Greeks think it is a normal seasonal thing to default at others expense as though there were no losers... or maybe no Greek losers... It remains very foolish to slap the hands that help... The Greeks want the drachma back without any currency valuation... isn't that consistent with their concept of who is supposed to loose...

I think the German travel agency was kind to offer to let them continue to book... and should insist in the currency requirement... or advise their customers of the long term high risk of doing business with the Greeks... They have a substantial world reputation to regain or tourism will vanish...

It is fine for the Greeks to live in a fantasy... however world money does not live there...
02:54 November 6, 2011 by Dizz
How can that be in a contract? There seems to be a misconception amongst many that you can put anything that you can dream up into a contract and if the other person signs it, then its enforcable by law. Wrong. Contracts have to be within the law to start with, both the letter and, if contested, the spirit. This means that any contract that is blatently one-sided will not stand up if tested in a court of law. Or that's the theory at least.
08:33 November 6, 2011 by mos101392
Leaving the Euro might be the best solution. They go back to the Drachma... The Drachma loses value... Greece then becomes a very inexpensive tourism destination. Greeks enjoy the new legions of tourists and count their Drachmas at the end of the day. Meanwhile, other countries will witness less tourism because it's cheaper to go to Greece.
09:13 November 6, 2011 by jg.
"We have to protect ourselves against these kinds of currency risks..."

Patently, the TUI spokesman is being economical with the truth. As TUI will no doubt expect their customers to continue to pay them in Euros, the least risk of currency fluctuations would be achieved by TUI paying their suppliers in Euros. In reality, TUI believes that a future Drachma would devalue and TUI would like to make a fatter profit by pocketing the difference (as there was no mention of making more money, it seems unlikely that TUI are planning on passing any savings on to their customers).

If the Greeks are to pay back what they owe to foreign banks, they will need to earn in foreign currencies and in countries with weak economies or unstable currencies, it is common for hotels and other travel companies to accept payments in popular foreign currencies. If TUI really want to help, perhaps they should ask to see an accounts summary and Greek tax return for each Greek company with whom they do business.

In the end, regardless of the currency in use, prices reflect demand, supply and competition. The snag is, the relatively few large tour operators tend to stifle competition, much like supermarkets vs farmers.
14:03 November 14, 2011 by agarwaen
@Eastard

A more accurate analogy would be that the "Germany" super market, gave some of its customer's a credit card to use in the store, and forced them to sign an agreement, to use the "Germany" store only. Also, it made them give up their garden and their livestock. It racked up some handsome profits that way, first from the product sales and secondly from the credit card interest. Now the customers are bled dry, and they can't borrow from their own family (their own currency) because that's forbiden also (the ECB isn't a lender of last resort, it's the only central bank in the world that operates in that way ). So the "Germany" Super Market is lending some more money, with a handsome interest, while trying to find ways to make its customers solvent in the long run, and get its promised interest returns, since it (its Banks) has recorded them as income already, in the Super Market's books.

Germany is looking for its own self interests, and rightly so, like every country should. Thinking that German politicians live in some fairy land and are "trying to help the Greeks" is kind of naive.
Today's headlines
President who pioneered Moscow ties dies aged 97
Former Cold War President of West Germany Walter Scheel. Photo: DPA.

Former West German president Walter Scheel, who helped pave the way for his country's rapprochement with the communist East, has died aged 97, his party's spokesman said on Wednesday.

Former East to lag behind West for years to come: study
Poverty in eastern Germany. File photo: DPA

Eastern Germany remains economically anaemic with little prospect of catching up with the rest of the country by 2030, a study published on Wednesday said.

Turkey's spy network in Germany 'thicker than Stasi's'
Photo: DPA.

Turkey has around 6,000 informants working in Germany, which experts say means they're each monitoring more people than the Stasi did in West Germany during the Cold War.

Germany's first 'intelligent' bridge to open in Nuremberg
File photo: DPA

An €11 million bridge, which is nearing completion in northern Bavaria, is set to include technology never seen before on the German Autobahn.

Stockpile food in case of attack, Germany tells citizens
Photo: DPA

Germany on Wednesday urged its population to stockpile food and water in case of terrorist or cyber attacks, as it adopted its first civil defence strategy since the end of the Cold War.

Ten injured after freight train crashes into bus in Osnabrück
The crash site in Osnabrück. Photo: DPA

A freight train crashed into a bus in Osnabrück on Wednesday morning, leaving several people badly injured, local media report.

Man wins ten-year court battle over €2.50 surcharge
Photo: DPA

An Austrian man has won a ten year court battle over an extra €2.50 he was asked to pay to get into a swimming pool in Bavaria a decade ago.

In Pictures
Düsseldorf swoons as Prince William comes for royal visit
'Well hello Mr. Prince'. Photo: DPA.

Prince William paid a visit to the Rhineland city of Düsseldorf on Wednesday to celebrate the state of North Rhine-Westphalia's 70th birthday. Here's a look at his royal stay.

Brexit
Frankfurt attempts to charm banks away from London
Frankfurt am Main. Photo: DPA

Germany's finance capital has spotted an opportunity with the Brexit-wary banking beasts of the Square Mile.

How did this bike end up on top of Berlin’s Molecule Man?
A professional climber 'rescuing' the bike hanging from the Molecule Man. Photo: DPA.

Berliners are still scratching their heads over how a bicycle ended up dangling from the capital’s iconic statue.

Sponsored Article
Why you should attend an international job fair
Gallery
Germany's 17 Olympic gold medals in pictures
Sponsored Article
Why expats choose international health insurance
Culture
7 American habits that make Germans very, very uncomfortable
Rhineland
Story of a fugitive cow who outwitted police for weeks before capture
Sponsored Article
Why you should attend an international job fair
Culture
Eleven famous Germans with surnames that'll make your sides split
Sponsored Article
Life in Jordan: 'Undiscovered treasure'
Lifestyle
The best ways to get a visa as an American in Germany
14 facts you never knew about the Brandenburg Gate
Society
Ten times Germans proved they really, really love beer
Sponsored Article
Why Jordan is the ‘Different’ East
Lifestyle
What's on in Germany: events for August 2016
Sponsored Article
Five things Americans should know about voting abroad
National
Six things you need to know when moving to Germany
Travel
These 10 little-known German towns are a must see
Sponsored Article
Jordan Pass: your ticket to the experience of a lifetime
International
German scientists prove birds can sleep while flying
Sponsored Article
Jordan: where history meets adventure
Technology
London v. Berlin: Which is better for startups?
Lifestyle
13 mortifying mistakes German learners always make
Sponsored Article
6 reasons expats use TransferWise to send money
Travel
Enter if you dare: Berlin's best abandoned haunts
Sponsored Article
Why you should attend an international job fair
Lifestyle
10 rookie errors all Brits make when they arrive in Germany
Sponsored Article
Five things Americans should know about voting abroad
National
How to get German citizenship (or just stay forever)
Sponsored Article
Jordan: where history meets adventure
Technology
Brexit will turn Berlin into 'Europe’s startup capital'
Sponsored Article
6 reasons expats use TransferWise to send money
Travel
Six soothing day trips to escape the bustle of Berlin
International
'Germany needs to make UK come to its senses'
Features
Six odd things Germans do in the summer
Features
How two gay dads cut through German red tape to start a family
8,647
jobs available
Toytown Germany
Germany's English-speaking crowd