Chain of bankruptcies in Russia’s Tourism Sector
Yuzny Krest Travel, another leading Russian tour operator, with a preliminary estimation of 9,000 tourists currently vacationing abroad, suspended its operation on Wednesday, September 11th.
Another 20,000 people or so who have bought tours from Yuzny Krest Travel may not be able to go abroad for vacation, according to Maya Lomidze, Executive Director of the Association of Russian Tour Operators.
The dramatic decline in demand for travel services caused by the consecutive bankruptcies of leading tourism companies in Russia, was the main explanation given by the Yuzny Krest Travel.
Established in 1998, Yuzhny Krest Group is among Russia’s top ten tour operators. It operates through two companies: Yuzhny Krest Travel and Romanov Club Luxury Travel.
The former offers domestic and foreign travel services, and sells train and plane tickets, books hotels and accommodates foreigners in Russia. The latter organizes premium foreign tours mainly in Greece, Indonesia, Dominican Republic, Cuba, the United Arab Emirates, and Thailand.
Yuzhny Krest has offices in Moscow, St. Petersburg, Yekaterinburg, Vladivostok, Ivanovo, Kazan, Kemerovo, Perm, Surgut, Tyumen, Khabarovsk, Khanty-Mansiisk, Novosibirsk, Samara, Ufa, and Yalta.
Its business has been insured by RESO-Garantiya Company with 100 million rouble coverage until March 11, 2015.
In the summer of 2012, Yuzhny Krest’s owners announced plans to attract a foreign investor, Australian Meiln Bank, which could acquire up to a half of the business. But the deal was never concluded.
In 2013, Yuzny Krest Travel’s earnings were reported at 1.9 billion roubles and net income at 1.7 million roubles.
Based on reports from Russian media, in summer 2014, Russia’s tourism sector witnessed a chain of bankruptcies. From mid-July, 17 companies closed operations due to financial problems. Among them are: Voyage Inart, Neva, Windrose World, Expo Tour, Labirint, IntAer, Nordic Star, Atlas, Milan Tour, Santa Lucia, Αviacharter-DV, Lime Travel και Solvex Tour. Most of them with clients touring in Greece.