Much attention was given last Wednesday to the announcement by TUI, Europe’s largest tour operator and travel group, that it had signed an agreement for a €1.8 billion ($1.97 billion) loan from the German government to help it navigate the near-term future as the coronavirus pandemic wreaks havoc on the travel and tourism industry in Germany.
At the same time, however, there were two other developments in the industry—both of which indicate a strong interest in both TUI and FTI, another top German tour operator, by two Egyptian entities. In some respects, the developments suggest that well-known entrepreneurs in Egypt, a favorite destination of German holiday makers, are seeking to increase their stake in Germany, a favorite source market for the Egyptian tourism industry.
First was the revelation that Hamed El Chiaty, a wealthy tourism entrepreneur and long-time business partner of TUI, had increase his stake in the TUI Group to over five percent. It was only about a month before this that it was announced that El Chiaty had purchased a 3.4 percent stake in TUI.
For those in the USA—which is the top long-haul destination of TUI’s Germany business—who don’t know that much about El Chiaty, he is chairman of Travco Group International Holding, founded Travco Travel Company of Egypt in 1979 and it expanded it into the tourism conglomerate that it is today.
According to the company’s website, Travco’s brands include the following:
—Hotel companies with a portfolio of 50 hotels & resorts that are between owned and managed, and 20 Nile cruises.
—Travel companies including Egypt’s Number One inbound travel agency and the 21-time winner of the Ministry of Tourism’s Award of Excellence.
—Transportation companies featuring the largest tourist transportation fleet of more than 700 vehicles in the Middle East.
According to an article in Yahoo Finance that dealt with the first purchase, “El Chiaty is no stranger to TUI having at various times in the past held a small stake in the business. He has also worked closely with the company through Travco,” adding that El-Chiaty “is getting a big discount on his purchase. Since the start of the year, TUI’s share price has more than halved in value on the back of the coronavirus outbreak.”
Second, billionaire Egyptian investor Samih Sawiris, made clear his intention to take over a majority interest in the FTI Group. Sawiris is already a shareholder of the Munich-based tourism group and was involved in the financing package which was finalized a little more than a week ago. As reported in the German travel trade publication fvw, “It was clear in the application for registration at the German federal antitrust authorities. According to that, the Luxemburg-based financial holding SOSTNT controlled by Sawiris seeks the ‘takeover of a majority stake’ and ‘sole control’ over Munich-based FTl Finanzholding.”
According to published accounts, Sawiris has had an investment in FTI since 2014. He comes from a multi-billion-dollar Egyptian entrepreneurial family. His Orascom Development Holding develops integrated holiday resorts such as El Gouna and Taba Heights in Egypt, Salalah in Oman or Andermatt in Switzerland. It also has residential properties in Egypt. Overall, the group manages 33 hotels with 7,205 rooms.
What all of this will do to the leadership of FTI—it is Germany’s third largest tour operator—is open to speculation. Prior to the acquisition, founder Dietmar Gunz was CEO of the FTI Group.
