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Ban on State Employee Travel Sinks Another Tour Operator

Published: August 5, 2014 (Issue # 1822)



  • "Over the first half of the year our revenues slumped 25 percent, among other reasons due to the regulation put on state employees traveling abroad," Pirogov told news agency RIA Novosti.
    Photo: Dave Heuts Photography / Flickr

The fourth Russian tour operator in just over one month went bust this weekend, said to have been toppled by, among other causes, a drastic slump in demand after the government recommended that security and law enforcement officers do not travel abroad.

This stricture, together with geopolitical tensions over Ukraine, an economic slump and a fast-weakening ruble, has resulted in a 20 to 50 percent decline in the flow of Russian tourists abroad compared to last year, depending on the destination, said Irina Tyurina, a spokeswoman for Russia's Tourism Industry Union, citing industry estimates.

On Monday, the tourism industry's troubles had drawn the attention of Prime Minister Dmitry Medvedev, who ordered his deputy Dmitry Kozak to take the situation under personal control.

"This is some kind of a breakdown, I do not remember anything like this happening before," Medvedev said, commenting on the state of affairs in the industry, the RBC news agency reported.

In July, Neva, one of Russia's oldest tour agencies, declared it was unable to meet its obligations, resulting in the abrupt cancellation of more than 6,000 active tours abroad. Two smaller companies halted operations at the end of July. And on Saturday, the biggest yet, tour operator Labyrinth, said it was suspending operations, leaving an estimated 25,000 customers stranded overseas.

Labyrinth said in a statement that the reasons for its shutdown included the falling value of the ruble against foreign currencies, and an overall negative political and economic situation. The ruble has fallen by 9 percent against the dollar since the start of the year, and by 7 percent against the euro, while the economy fights to avoid slipping into recession.

Labyrinth also blamed the recommended ban on travel abroad by employees of the state's law and order apparatus, such as prosecutors, police, tax enforcers and military personnel — called in the vernacular siloviki, or strongmen.

In April, amid the mounting standoff between Russia and the West over Ukraine, Russian media reported that the government had strongly recommended these state employees to reconsider traveling abroad due to the political uncertainty.

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ALL ABOUT TOWN

Monday, Sept. 22


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