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So far this year, 11 package travel companies have gone bankrupt as a result of the corona pandemic. But it may be too blueberry to count now that many more people have lost legal warranty insurance. Therefore, they are no longer allowed to sell tour packages after December 1.
– Not justifiable
It is a dramatic image of the Travel Guarantee Fund (RGF) in a letter to the Ministry of Children and Family Affairs of the situation of the package travel companies in the country.
It is the EU package travel directive that regulates companies that sell several travel services in a single package, usually flights and hotels. They must provide a guarantee to the Travel Guarantee Fund that ensures that consumers get their money back for prepaid trips in the event of bankruptcy.
In September, the Swedish company Nordic Guarantee terminated almost all guarantees in the Nordic region. It affected 63 members of the Travel Guarantee Fund. They cannot sell tour packages after December 1 of this year if they cannot provide a new guarantee.
– We understand that many are upset and disappointed with this decision and that this puts many companies in a very difficult situation. It was certainly not an easy decision, but taking a risk that we no longer believe in is not justified, says Michael Gantén in Nordic Guarantee to DN.
– A wave of bankruptcies
Package travel companies can provide a guarantee themselves with their own funds or request a guarantee from banks. “The first is irrelevant for almost all members, since they have been without rotation for six months. The latter is seen as challenging, “the Travel Guarantee Fund writes in the letter.
Aki Johannes Viitala, CEO of the Travel Guarantee Fund. (Photo: Private)
“The effects are very serious for the affected organizers. We experience that almost all guarantors refuse to issue new guarantees, as this increases their exposure. This means that we will possibly experience a wave of bankruptcies. Layoffs, end of 2020”, writes the managing director of the fund, lawyer Aki Johannes Viitala.
– We have no idea what will happen now, other than the fact that the collateral market has become incredibly difficult as a result of risk, Viitala tells DN.
– And I see the symptoms that a very large proportion of small and medium-sized companies may now go bankrupt if the guarantee situation is not resolved.
Will not provide state guarantee
In the letter, the Travel Guarantee Fund, among other things, has asked for clarification on whether the state will act as guarantor until 2022 and estimates that total guarantees of around NOK 1 billion are needed.
Parliamentary representative Åsunn Lyngedal (A) asked earlier this month if Trade and Industry Minister Iselin Nybø (V) will provide guarantees. Nybø responded that “some players will be able to present themselves without a guarantor on December 1, 2020 and will not be able to legally sell vacation packages. It is a challenge to use the resources of society to establish financial measures to prevent this in a situation that is longer than expected and possibly creates lasting changes in consumer preferences. “
– Works almost all day
The Travel Guarantee Fund is also struggling with the economy as a result of a significant increase in workload in the wake of the corona pandemic and a decrease in the number of members paying annual dues. In the letter to the ministry, the fund proposes to double the rates paid by package travel companies; from just over four to over eight million crowns.
But in an email sent to DN on Friday evening, the director of the department in the Consumer, Faith and Philosophy department of the Ministry of Children and Family Affairs, Aslaug Skrede Gauslaa, writes that “it is not relevant to duplicate the Annual fees that package tour operators now pay as members of the Travel Guarantee Fund. “
– It creates a challenging situation for us. We are the smallest travel guarantee fund in Europe with three employees and we work most of the day. In Denmark and Sweden, they are three, four or five times more employees. We have no other income than fees and no contribution to the administration of the ministry. And we already have about 100 fewer members now than at the beginning of the year, which means lower income. But we are in dialogue with the ministry about this, says Aki Johannes Viitala at the Travel Guarantee Fund.(Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our cases via a link, which leads directly to our pages. Copying or other use of all or part of the content may only be made with written permission or as permitted by law. For more terms, see here.
