In Russia, minimum financial guarantees for tour operators have been raised, now for domestic tourism they start at 10 million rubles, and for outbound tourism at 30 million rubles and higher depending on company revenue. The amendments drew sharp criticism from regional travel firms, which fear many will not meet the new requirements and will have to leave the market. The article also explains why industry representatives insisted on individual travel insurance and why they believe the decision is dangerous.
The minimum amount of financial guarantees for domestic tourism tour operators in Russia has been raised to 10 million rubles, and for outbound tourism operators to 30 million rubles. The relevant amendments to the law “On the Fundamentals of Tourist Activity in the Russian Federation” were approved by Russian President Dmitry Medvedev on June 28, 2009.Financial guarantees vary depending on the status of the travel company. Thus, for domestic tourism operators, their amount is at least 500,000 rubles. For inbound tourism operators, the minimum threshold is set at 10 million rubles. For those companies that operate in the outbound tourism sector, the amount of financial guarantees will be determined depending on revenue. If annual profit from the sale of a tourism product is less than 100 million rubles, then the financial guarantees will amount to at least 30 million rubles. This amount is also set for those who operate under the simplified taxation scheme. For tour operators with revenue of less than 300 million rubles, financial guarantees are set at 60 million rubles, and for those with revenue above 300 million rubles, at 100 million rubles.
At the same time, travel companies in a number of Russian regions, including the Irkutsk Region, opposed increasing the amount of financial guarantees. Thus, in November 2008, when deputies of the State Duma of the Federal Assembly of the Russian Federation proposed increasing financial guarantees for outbound tourism operators to at least 100 million rubles, the Siberian Baikal Association of Tourism sent an appeal to the President of the Russian Federation and the State Duma asking that the increase be avoided. At that time, the travel companies were supported by the government and the Legislative Assembly of the Irkutsk Region, as well as the regional branch of United Russia. In June 2009, when new amendments to the federal law on the fundamentals of tourist activity were being considered, travel companies of the Angara region sent their proposal to the Russian Union of Travel Industry. They were supported by tour operators from other regions of Siberia and the Far East. “We adhere to the view that financial guarantees should genuinely protect the rights of consumers and operators, rather than lobby the interests of certain groups of insurers and large travel companies,” Igor Kovalenko, chairman of SBAT and general director of the Irkutsk bureau of international tourism Sputnik, said at the time in a conversation with a BaikalLand correspondent.
According to representatives of the travel business, many companies in the regions simply will not be able to pay insurers the required amounts. For example, the financial guarantees are comparable to the turnover of many travel agencies in the Irkutsk Region. According to regional tourism expert Vadim Kopylov, as a result, 30% of companies may disappear from the tourism market of the Angara region. This, in turn, will lead to a reduction in contributions to budgets at all levels and the dismissal of a significant number of people employed in the tourism industry and related sectors.
Tour operators in the Irkutsk Region, as well as in many other constituent entities of the Russian Federation, have repeatedly advocated individual travel insurance. They brought such proposals to lawmakers. Igor Kovalenko, in particular, explained that insurance for individual trips would reduce travel companies’ expenses while ensuring tourist safety. Moreover, such a scheme is used in European countries and other developed countries, where it has long proven itself. However, the federal authorities chose the path of increasing financial guarantees.