ITC is yet another victim of price war on the market
ITC (International Travelling Club) is facing financial problems. On one hand the activity scale of this tour operator is incomparable to fellow-sufferers with their notorious bankruptcies over the recent years. On the other hand, the company specializes in far-away exotic destinations which are not cheap. The responsibility of the tour operator is insured for 30 million roubles by Megaruss-D Company.
Recently, ITC delayed salaries, employees began to leave: 8 employers of the air tickets department left for VIP Service Company at once, sales managers are sending around their CVs as well. Since in didn’t concern tourists at that time, there was hope that the tour operator would leave quietly. But yesterday a first warning signal came: Murmansk Travel Agent "Rainbow of the North" reported to RATA-news, that the Majestic Elegance Punta Cana 5* hotel in the Dominican Republic demanded the tourists to pay for accommodation, as Moscow’s tour operator didn’t transfer the money. We’ll note that this was a family of four, who bought the tour for 20 days and the total cost for accommodation was $10000.
“The worst thing is that we have transferred money to ITC in January, and the tourists travelled only on April, 4. They might have been stopped, warned that the hotel is not paid yet, but the tour operator didn’t report us about his problems, - says the Deputy Director of the agency Irina Chuprakova. – The clients had to pay for the first night of their stay. What to do next – we have no idea”.
Rostourism has already joined in with solving the problem: a letter, explaining that tourists are not to be blamed for the problem, was sent to the hotel. Tomorrow an official appeal will reach the Ministry of Tourism of the Dominican Republic.
As of yesterday, about 150 ITC’s clients were overseas, most of them are in Cuba –
Preliminary estimations show that the sinking tour operator has already sold its packages to around 300 people for about 62 million roubles ($2 million) So for now ITC fits into the amount of its financial warranty.
Some of the sold tours don’t start until May-June. That’s why it’s important to debar tourists’ departure to far-off destinations without checking whether the money have been transferred to the hotels.
As the Director of Tourism of ITC Elena Konkina told RATA-news earlier that current winter season was very challenging for the company. There was great dumping on such popular destinations as Cuba and Dominican Republic, which play a significant role in the company’s business. “Because of the excess of air transportation we had to sell flights for $500 while the prime cost was $1200” – explained Mrs. Konkina. Thereby, the company was losing a minimum of $700 on every tourist, covering losses with turnover money. Sooner or later a cash gap should have occurred – and it finally happened.
The Director of Tourism of the Caribbean Club company, Dmitry Saakov confirmed that during the winter season many companies were at risk. “Go to any website and you will find vacation proposals at the Caribbean for 60 thousand for two which is complete nonsense. There’s a concept of prime-cost and there’s market cost, and tour operators are obliged to follow it. It’s a pity if ITC didn’t have enough resources to stand this race, - said Mr. Saakov. – But it’s especially difficult in such struggle for single-industry niche operators”.
General Director of TEZ Tour, Vladimir Kagner is sure that it’s not about being single- or multi-profile tour operator. “The bigger is the business, the more serious are the problems, but it’s not about the scale of business, but about the approach to it. ITC is a medium-level company; for sure they didn’t have financial resources which would have allowed them to take blocks at high-risk destinations. Why would one send tourists to Cuba at low cost if only the ticket costs more than one thousand dollars? One should have time to adjust their programs. And there are examples, we have successful and stable niche-holders on the market” – he noted.
The company, International Travel Club, ITC was founded in 1995 as a multi-profile tour operator and ticket selling office. Recently the company was focusing on expensive exotic countries, such as Mexico, Brazil, Kenya, South Africa, Mauritius, Peru, Argentina and many others, as well as those far-away destinations which became mass - the Dominican Republic, Cuba, Vietnam. Judging by the responses from agents and other market players, there were no complaints about the company’s performance, on the contrary, it was always famous for its managers’ professionalism and good tourist services.
The company didn’t officially announce the closure of business. The website still offers a wide range of exotic tours.