Financial Services, Latvia, Markets and Companies, Tourism

International Internet Magazine. Baltic States news & analytics Monday, 06.07.2020, 12:38

Several Latvian tour operators have serious financial issues

BC, Riga, 31.08.2018.Print version
Of the 208 Latvian companies registered as tour operators 55 are struggling with serious financial problems, which might prevent the companies from meeting their obligations if left unsolved, Intars Mikelsons, a board member of Kreditinformacijas Birojs (Credit Information Bureau), told LETA.

While 46 tour operators have overdue bills or tax debts, the total amount of which exceeds EUR 206,000, the credit rating of 69 tour operators is “good”.

The fact that 40 tour operators are currently in the process of insolvency or liquidation reflect the unstable situation in the tourist industry, Mikelsons said. “Data analysis shows that those companies that have defined their core business as tour operation only 30 % do not have overdue bills. This result is not bad in comparison with other industries, because in the food industry, for instance, the average credit ratings are even lower, but the end-consumer is not running the risk of not receiving the service at all,” said Mikelsons.

“In the tourist industry, by contrast, the risk affects everyone who do not arrange the trip themselves but entrust it to a third-party. Persons who buy trips from tour operators are crediting them in a way, and if the operator has financial issues, the client can easily lose both the money and the trip,” said Mikelsons.

Vilnis Klinovics, board chairman of Impro tour operator, said that the one popular group trips, which once used to be the tour companies’ main source of income, have fallen out of fashion. “Now, anyone can plan their trips themselves and buy them via telephones in a few minutes. Accessibility of information and technological development have changed the industry. On the other hand, people’s interests are becoming increasingly diverse, which means that the operators have to look for exotic solutions,” Klinovics said.

Kreditinformacijas Birojs was founded in May 2013 by Germany's Creditinfo International GmbH and several Latvian banks -- ABLV Bank, Citadele Bank, DNB Banka, Nordea Bank, SEB Banka and Swedbank Latvia.

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