229 TOUR OPERATORS WERE LIQUIDATED IN RUSSIA

The Russian tourism market is rapidly shrinking. According to the Federal Register of Tour Operators, since the beginning of 2020, 229 organizations have dropped out of the list of companies working in the field of outbound tourism. Experts predict that this may lead to a state of oligopoly, in which only a few large companies may remain in the market in the nearest future.

Small and medium-sized businesses cannot cope with the tightened financial requirements - the main problem is the orders of the Federal Tourism Agency, which oblige commercial organizations to provide information about their financial support to continue their activities.

Acquiring appropriate guarantees from the insurance companies has proved to be very problematic in recent years.

At the same time, industry experts call these payments meaningless, since very often they cannot help to protect Russian tourists.

Representatives of the insurance companies themselves note that the amount of damage often exceeds the sum of the insurance. In some situations, the insurers are unable to fulfill their obligations, since the tour operator has a revoked license and the insurance payments automatically fall under the restrictions, established by the supervisory authority.

It is interesting that the number of liquidated tour operators grew up during the months preceding the imposition of restrictions and the closure of borders.

In January, Federal Tourism Agency excluded 55 organizations from the register of companies; 81 more were excluded in February and 38 in March. Thus, in the first quarter of 2020, the activities of 174 companies were officially terminated.

Another important factor of liquidation of many tour operators in 2020 was the pandemic, which forced the business representatives to independently declare the termination of their activities. While large companies are confident enough to keep afloat in the current crisis, small and medium-sized entrepreneurs prefer to close the companies.

The third factor for the self-liquidation of travel agencies were the exactions of the PRFs (personal responsibility funds), which were introduced by the Tourhelp Association.

The tool for protecting clients in the event of a tour operator's bankruptcy has led to the fact that a little more than 430 companies are currently operating in the Russian market, while back in 2016, 2.5 thousand organizations were members of the association of tour operators.