Germany cuts cost of travel protection fund for tour firms

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.

• 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%

• The association said this step would free up about €70 million ($79.5 million) a year and strengthen the competitiveness of package tours

• 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

• Tour operator TUI said the move was "a correct interim step," and further reductions should follow quickly

• 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

• 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)