Russian Union of Travel Industry: Almost 130,000 Russians affected by 14 tour operators' bankruptcy

A string of tour operator bankruptcies which started in the middle of June has affected about 130,000 Russians, Russian Union of Travel Industry (RUTI) press secretary Irina Tyurina said.

A string of tour operator bankruptcies which started in the middle of June has affected about 130,000 Russians, Russian Union of Travel Industry (RUTI) press secretary Irina Tyurina said.

"The bankruptcy of 14 tour operators in the period from July 16 to September 15, 2014, affected about 130,000 Russians, more than 70 percent of them were customers of five large companies - Neva (whose operations were halted on July 16), Labirint (August 2), Solvex-Tourne (September 8), Yuzhny Krest (September 10) and Versa (September 15)," Tyurina stated.

She said she implied the 56,000 tourists who had to be evacuated from foreign resorts because of problems with hotel accommodation and round-trip tickets and those who failed to go on a trip although they had paid for their tours.

"The Russian tourism market is experiencing a profound systemic crisis triggered by political and economic factors. The year 2014 was much worse for the travel industry even than the crisis year 2009, in which outbound tourism dropped 15-20 percent. This year the demand for tours dipped 30-50 percent and sales practically came to a halt after the first four or five bankruptcies," Tyurina said.

The lack of floating capital and tight rivalry on the tourism market, where the supply is much larger than the demand, have caused a domino effect and another ten companies have had to suspend their operations, she said.

"Yet the present-day situation on Russia's tourism market cannot be called unprecedented. A similar cleansing has earlier occurred in other countries, primarily those in Europe. For instance, the UK witnessed over a hundred bankruptcies in 2008-2010 and 41 companies went bankrupt there in 2010 alone. Twelve tour operators of various levels went bankrupt in France and another ten in Poland in that period," the RUTI press secretary said.

She noted that the Russian travel industry was not the leader in bankruptcy terms and the number of Russian banks who had had to close down was much larger.

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