Insolvency Forces Lithuania to Tighten Market Regulation

The politicians in Lithuania are looking to tighten their tourism market regulations after the fresh insolvency cases have left many tourists trapped abroad.

Several other tourists are now losing their vacations. Recently, Fresh Travel, a tour operator of Lithuania, declared that it’s closing down the operations because of its insolvency. This shutdown has caused many clients to lose their vacations as well as money. About 470 travelers were trapped in Portuguese and Egyptian resorts due to this shutdown. Lithuanian Tourism Department had organized transportation for the trapped travelers.

The Lithuanian officials revealed that about 2319 travelers suffered losses because of Fresh Travel’s insolvency. The loss amount accounted to 2.3 million litas or 0.8 million American dollars. Although the company’s activities were insured for about 700,000 litas, the funds were mostly utilized by the Tourism Department to bring the Lithuanian travelers back. Fresh Travel has become the fourth travel operator that has become insolvent after companies like Neoturas, Go Baltic Travel, and Go Planet Travel. Finance specialists and experts have forecasted more travel agencies and tour operators will join this group.

A company responsible for offering credit assessment services, called Creditreform Lietuva, has revealed that nearly 37 percent tourism companies in Lithuania have low credit worthiness. Merely one-fifth of the travel organizing or selling companies have credit rankings higher than average. Lithuanian officials say that the tourism bankruptcies are purely due to regulation insufficiency. When Fresh Travel collapsed, Minister of Economy, Evaldas Gustas, was summoned to Lithuanian Parliament for explaining the scenario in tourism market. He promised that amendments will be introduced and requirements will be tightened which will expand powers of Tourism Department.