Consumer rights

Several tourism companies could soon go bankrupt in Latvia / Article

“The impact of the pandemic in 2021 has been severe for the tourism sector as various services have been restricted from time to time,” said Baiba Vītoliņa, head of the Center for Consumer Rights Protection (PTAC), indicating that although that the number of insolvent companies is not very large, there are a lot of consumers affected.

Currently, three companies in the tourism sector have insolvency proceedings. One of them is Mouzenidis-Riga trip. The company had an insurance policy and consumers are reimbursed.

“Most consumers will get 83% of their money back. At the end of the year, there are two more companies that have an insolvency file. To know, Jēkaba ​​aģentūra and Marites A & S Ltd. », Declared Vītoliņa.

However, these two companies do not have insurance policies. They expired last year and the trader had not purchased any new ones.

“We PTAC can only suspend the license at this point in accordance with the laws and regulations and withdraw the license after six months. The trader can no longer operate but cannot start the old insurance if there are no cash flow issues for the business. It has been a year since then and there is no business insurance that could be used, so there is only one insolvency proceeding left, ”Vītoliņa said.

This means that customers should try to recover money from canceled trips by approaching the insolvency administrators of these companies.

“There’s actually no guarantee there. Customers come into the normal line with the insolvency administrator, where many other claims come before consumer claims. If there is a guarantee of safety, then there is a place to take it. We have a number of other companies like these two that have suspended their licenses. The estimated amount of money that could be unsecured for the consumer is around half a million euros. It could be quite a large sum, ”said the PTAC chief.

Last year, the license was suspended for 20 companies. Baiba Vītoliņa pointed out that before the pandemic, it was rare for someone to give up the license. It was the high cost of the insurance policy that, in his opinion, was an unbearable burden during the pandemic.

“The pandemic has certainly demonstrated many loopholes in the existing legislation on safety guarantees, as it is too expensive a mechanism for this industry. This, on the one hand, is good for the consumer, but in principle it is a very expensive service. As a result, we have come to the point that a number of businesses cannot get back to business, so if they can’t get back to work, they can’t reimburse consumers because so much of their money is in. hotels that have already been reimbursed. », Explained the person in charge of the PTAC.

Baiba Vītoliņa predicts that further bankruptcies of tourism companies will be expected this year.

On the other hand, Deputy State Secretary for Economic Affairs Raimonds Lapņš, explaining the current arrangements, stressed that guarantees are an EU approach. It was created before the pandemic to protect consumers in all countries in the bloc equally.

President of the Latvian Association of Tourism Agents and Operators, responsible for the tourism agency Vanilla trip, Inga Kavaca, said the real picture of the impact of the pandemic on the tourism sector would be visible in the second half of this year.

“Because you have to take into account the fact that a great many companies have not yet resumed their activities. For example, companies that welcome tourists to Latvia. They have not resumed their activities due to travel restrictions. In 2020, when it was the start of the pandemic, it was different, yet state aid granted in summer and fall was significant. But we can say that there was no support for the industry in 2021, ”Kavaca said.

Likewise, a major loss is the workforce that drifts to other industries during downtime. Kavaca estimated that companies in the sector work with very little capacity:

“10% of the 2019 volume. The capacity has decreased a lot. The caveat is that you are not banned from working, so you don’t need any assistance. It is not prohibited, but it is in fact not allowed. “

She said that a dialogue with the Ministry of the Economy had taken place since the summer of 2020, but that there had been no progress in correcting the legislative gaps.

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