Requiem on travel business

The Russian parliament amended the bill “about fundamentals of travel works in the Russian Federation ”. Moreover, it amended it exactly in the variant of which small travel firms' representatives beware most of all. Now they have either to leave the business or to search rich and strong “patron”, which mean the end of independence.

Officially the bill's aim is “perfection of state control of travel business in the country, securing rights and legislative interests of tourists on condition of licensing repeal of this sphere of activity”. In fact it is a set of requirements which have little in common with requirements at issuing license. And the main requirement is the presence of finance provision mechanism of travel operators' responsibility.

Now a travel operator is obliged to have a large quantity of funds which may be used to cancel damage indicted to consumer in the case of unforeseen circumstances. A large quantity varies from 500 thousand to 10 million roubles.

Travel operators, working within the country, must have 500 thousand roubles as an activity financing guarantee. Those who try to reach the international market must arrange with 10 million roubles. Firms are obliged to hold these sums on bank accounts and use them only in conflict cases with consumers.

As you see, such requirement similar to the hit of head with a hammer for the republic travel business. A company may find 500 thousand roubles and carry Yakutians and few guests of our republic, let's say, along the Lena river, but to gather 10 million roubles is impossible for them. What one could say if, according to results of 2005, the income of the whole travel business of the republic amounts little more than 100 million roubles. This sum is less than the clear profit of “SakhaTelecom” in a year.

So, after the bill comes into force, there will be no travel enterprise in the republic, which could carry in rich consumers from foreign countries and otherwise, to carry out our citizens to Turkey , Egypt and China . However, one can somehow extricate with foreigners, because the bill says that a foreigner who get to our country on his own, and who is served by a local travel firm, has equal rights and firms aren't obliged to have 10 million roubles in its account, 500 thousand roubles is enough.

But the departure tourism is another case. If a firm should find 10 million roubles otherwise it has to cancel its charter flights. Small travel companies dealing with departure tourism have, as it is mentioned above, either to stop their activity or to be sold to a large company, which is registered somewhere in Moscow and to announce itself as its branch.

While discussing the bill, many deputies boastfully claimed that everything is made for the defense of rights and interests of Russian tourists. But actually such claim is fair partly. Now firms will have special reserve fund, from which a compensation of troubles caused by poor-qualified services can be immediately granted. But first a tourist should prove it through courts and cassations.

And the main thing is that any forbidden activity leads to the raise on prices of services (goods) for a consumer. It is an immutable law of business. Expenses must be compensated and they compensate it by the raise on prices of services. An absence of competition will assist to it, because when small firms leave the market, big ones can offer consumers more expensive services.

Even now it is foreseen that the raise on travel service prices will have increased in 12 per cent by the end of 2007. Briefly, it happens traditionally with the principle “wanted as better”.

It is expected that the bill will come into force after official publication and will begin to work since June 1, 2007. It is expected that there will be a transitional period in the first year of existence of law. During this period, finance obligations of travel firms working at international level, will amount not 10 but 5 million roubles. After June 1, 2008, it will amount the whole 10 million roubles.

Written by Vitaly Obedin.
Translated by Zhenya Popova, YSU student.

Resource: Yakutsk Vecherny Newspaper