The“Pearl River”: How the operator of cheap tours was going bankrupt.

The“Pearl River”: How the operator of cheap tours was going bankrupt.

The story of the Pearl River tour operator, specializing in the tours to Chinese Hainan, was quick and vibrant.

Thousands of Russian tourists flattered about cheap trips, scams with air tickets, disputes with the Chinese side and, finally, the statement of the official international operator Pearl River that they did not know about the existence of the Russian “branch”. Is it possible in the modern world?

"Pearl River" bursts into the market

In September 2017, Pearl River - a new star of the Russian travel market, began shining and finally opened the office in Russia. In the register of tour operators, the company was registered under the name “Hercules Travel”, and flights under the reliable wing of “Wim Avia” (declared bankrupt in 2018) should have started in early November.

The problems with company arose soon after the start of work and there were several reasons for it. First, “Pearl River”promised its partners in the Russian market a commission of 8-12%, while other operators offered no more than 7-10% for agent fees. The second reason is law prices. "Pearl River" offered weekly tours for 19 thousand rubles per person for double rooms at the China’s Hainan resort. As the reasoning for such a good offer, the operator stated that it had direct support from the Chinese government, which provides subsidies to local tourism companies.

However, the plans to cooperate with “Wim Avia” were not destined to come true - before the start of the first flights, the air carrier announced the termination of its activities. In order to find a replacement for it, the “Pearl River” had to postpone the tours to the end of December 2018 and start cooperating with“Ikar Airlines”. The first flight was scheduled for December 21, 2017, but did not take place again. The official reason is the refusal of the Chinese authorities. In order not to completely spoil the reputation of a new company, it was decided to send tourists to Vietnam’s Nha Trang resort, which is most similar to Chinese Hainan Island.

The"Pearl River": clouds are gathering

Everyone seemed satisfied with it, but just a few days passed, and on December 25 the tour operator took off the flight program due to “high workload during the New Year holidays”. The tourists did not fly to Vietnam either (except for two happy flights). “Ikar Airlines” noted that this was the initiative of the “Pearl River” itself.

Tour operator didn't withdraw from the obligations undertakenand offered to return 100% of the funds, or transfer the trips to other dates at the same cost. But flights carried over to January were canceled, too.

After an unsuccessful start, everything finally seemed to fall into place, but it did not. The tour operator was cancelling flights, after it “Pearl River”simply cut down the flight program, leaving one tour a week. ‘Pearl River” and “Ikar Airlines” failed to work together - by the spring of 2018, the company had already switched to the third air carrier, the “Alrosa” company. A month later, the tour operator announced the cooperation with another airline – “Pegas Fly”. Closer to the summer of 2018, the “Pearl River” began to work normally, having problems with departures from time to time. Tourists began to actively buy tickets that promised luxurious conditions for little money and were even willing to risk canceling flights for a hope of a cheap trip to Hainan.

The "Pearl River" on the eve of a bankruptcy

Except Moscow and St. Petersburg, the tour operator worked in Barnaul, Tomsk, Chita and a number of other cities in Siberia and the Far East. From time to time the company wasannouncing the expansion of flight programs and other plans, but they all failed.

The first major blunder took place in November 2018, when 300 tourists got stuck in China for more than a day due to the breakdown of the “Ir Aero” (another airline) plane. On December 2, a “surprise” was waiting for those who were going to fly from Zhukovsky airport near Moscow - they simply did not fly out. It turned out that the operator did not pay for the “Pegas Fly” flight program. But the "Pearl River" was still trying to maintain a reputation and sent tourists to Hainan not from Moscow, but from St. Petersburg (God knows how they got there).

In general, the entire work of the tour operator actually consisted of constant mistakes and attempts to settle them. The problems were either with the Chinese side, with carriers, with money, or rather with the money’s absence. Apparently, the main problem of the “Pearl River” was a poor management.

The situation was also monitored by the Federal Tourism Agency. As a result, on December 12, 2018, the “Pearl River”was excluded from the registry. The last straw for the regulator was the dispute between the tour operator and “Ir Aero” - the airline stated that it would not fly according to the program until it received a debt of $ 2.3 million. In their defense, representatives of the “Pearl River” answered that there was no money. This time the universal excuse did not work for some reason.

The"Pearl River’s" failure

Shortly before bankruptcy, all those who supported the tour operator had a hope - an investor. The “Pearl River” was supposed to receive $ 100 million from Aviation Service Limited, but soon it turned out that the investor was deeply in debt.

During all this mess, there were almost 3,000 tourists in China (without return tickets) who were subsequently taken out at the expense of the “Tourist Assistance”. The Federal Air Transport Agency also joined the case, accusing the Pearl River of a fraud - the company allegedly was selling airline tickets after it has decided to stop all the flights.

Finally, the “Pearl River International Travel Company”unexpectedly spoke in this case - the original "Pearl River" was operating in China. The tour operator stated that the Russian bankrupt has nothing in common with their company and was not at all vested with the authority to organize a representative office on behalf of the “Pearl River”. They also noted that the Russian “Pearl River” falsely pretended to be part of the company.

The Chinese authorities did not believe this version - 17 managers of the “Pearl River International Travel Company”were put on the wanted list in the spring of 2019. They even established a decent amount for information about their location, 20 thousand yuan (about 180 thousand rubles). Partners in Chinaconsidered that the whole story dealt an image blow to tourism, and the very attempt of a local tour operator to disown a ruined Russian counterpart looks implausible. However, the fraud by the “Pearl River” has not been proved.

In conclusion, we cannot but note that Russian operators are quite unsuccessful in conquering the Chinese market. Before the “Pearl River”, the “Matryoshka-Tour” company also could not cope with the situation. Now another player has entered the market, promising to conquer Hainan - the “Tartus-Tour”operator, referring (as well as the “Pearl River”) to help and direct support from the Chinese authorities.

What all this will lead to is still unknown, however, tourists booking “Tartus Tour” tours at (again) fairly low prices are warned in advance that the flights may be canceled. Would the Chinese authorities, who are worried about the image of Hainan, like this? Hardly they would. It turns out that the tourist market can be shaken by another unpleasant story, especially since even really large operators with a history have recently started being closed.


26.12.2019





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