NIKA TOUR OPERATOR IS LEAVING THE MARKET

One of the oldest tour operators of St. Petersburg that have worked on the market for 27 years is going to completely terminate its activities since 22 June. The main reason, according to the Nika Company, is not the pandemic and the restrictions caused by it, but the reluctance of insurance companies to continue contractual relations. The relevant information was voiced by the press service of the Russian Union of Travel Industry.  

Other travel companies, as the experts say, face the problems with financial security as well. Legislation makes the tour operator responsible for default, offering a choice between insurance instruments, a bank guarantee or the formation of a Personal Responsibility Fund (PRF) in the amount of 7% of the price of tours. However, the prevailing practice of concluding agreements with the insurance companies in terms of uncertainty in the tourism market leads to disastrous consequences.

Many insurance companies, for which the conclusion of such agreements is not binding, began to work individually with each company, often without prolonging the validity of the agreements concluded earlier.

Insurers themselves see the maximum risks insurance cases occurrence during the collapse of the travel industry due to the pandemic.

As it was emphasized by the All-Russian Union of Insurers, the situation makes the liability insurance mechanism impossible for the work of travel agencies.

Nika tour operator faced the same problems. It became known that the insurance company Ingosstrakh contacted the company in February. After a long discussion of the conditions, the insurer eventually refused to conclude an agreement. Other insurers that were contacted by Nika offered financial guarantees in an amount not exceeding 10 million rubles, while the travel company required a sum of 50 million to cover its turnover.

Insurance companies could agree on such a sum only on the basis of a preliminary deposit of the full amount. Nika did not have enough funds to choose a way of Formation of PRF in the amount of required 7% - the company did not have extra 6 million rubles.

As a result, a travel agency with an impeccable reputation leaves the market.

About 700 customers will not be able to use the services they have already paid for, although existing insurance obligations of the company should protect them by paying the insurance indemnities. Earlier, Nika specialized in organizing cruise tours, sending customers along the rivers of Siberia and Lake Baikal. The company also organized combined trips along the rivers of Africa, America and Europe. At the moment, the company has obligations to those customers whose tours were rescheduled to the later dates, up to August 2021.

According to the latest data, it also became known that the Nika tour operator was excluded from the unified federal register. The press service of the Federal Tourism Agency reported that the leadership of the travel agency decided to leave the market - financial support in the amount of 53,770,613 rubles would be enough to pay the insurance indemnities all the customers.