FROM JANUARY 1, THE NEW LAW OF UKRAINE 'ON TOURISM' COMES INTO FORCE
November 18 of this year can rightly be called the day of tourism in the Verkhovna Rada: on that day, the "tourism constitution" of Ukraine was finally adopted - the law "On Amendments and Additions to the Law of Ukraine 'On Tourism'". 276 people's deputies voted for the adoption of the law. (Recall that the draft law was unanimously adopted back on July 15.) The document can be found on the website of the State Tourism Administration.
On the same day, the final point was set in the elimination of the main "brake" of the hotel sector - the hotel tax. Indeed, what development of the hotel sector could be talked about if hoteliers were forced to give the state up to 80 kopecks from every hryvnia they earned?! Officially, this tax was eliminated back in April of this year, but until last week it remained in the system of Ukraine's tax legislation. Whether the cost of staying in hotels will decrease after the abolition of this tax or not is a rhetorical question, but there is no doubt that the new law "On Tourism" will completely and fully change the work of the entire tourism sector.
The debate around the law divided all tourism firms into those who are "for" and those who are "against". According to Igor Golubakha, president of the tourism company "Gamalia" and chairman of the recently created Association of Tour Operators of Ukraine, about a hundred leading tour operators spoke in favor of adopting the law. For reference: today in Ukraine about 5.7 thousand tourism business entities are registered. The law is mainly opposed by small companies. About 800 hotels, sanatoriums and tourist bases licensed to engage in tourism activities have not yet decided on their preferences.
Those who are "for" believe that the old law does not in any way correspond to today's realities. Indeed, eight years have passed since it was adopted (that was back in distant 1995) - and to say that the tourism market has changed is to say nothing. "Often the entrepreneurs themselves could not find answers to many questions that arose in the course of their economic activity," notes Anatoly Matvienko, former deputy general director of the company "SAM", and now first deputy head of the State Tourism Administration. "Nowhere could we even legally confirm what we do!" Indeed, the law had many "holes": there was neither clear terminology nor a definition of types of tourism. According to the head of the State Tourism Administration, Valery Tsybukh, the new law takes into account the recommendations of the World Tourism Organization, EU directives and fully complies with world practice in tourism activity.
The main argument of those who opposed the adoption of the law is that the tourism sharks simply want to monopolize the market by squeezing out their small competitors: they say, they have been hanging around for a long time and getting in the way of work. For this purpose, it was necessary to divide everyone into operators and agents, and also to fleece them on top of that. Is it a joke - for the right to be called a tour operator, a firm engaged in, say, children's tourism and earning some 10 hryvnias per person or driving buses to Bulgaria, to pull 20 thousand out of its turnover? Or pay 2 thousand euros for the right to sell tours of "SAM" or "Gamalia"?! And in general, who and how will "spin" this money?
We will answer these questions later, but first let's define the terms. According to the law, tour operators are "legal entities created in accordance with the legislation of Ukraine, for which the exclusive activity is the organization and support of the creation of a tourism product, the sale and provision of tourism services, as well as intermediary activities for the provision of characteristic and related services, and which have been duly licensed for tour operator activities". Travel agents, respectively, are "legal entities created in accordance with the legislation of Ukraine, as well as individuals - business entities that carry out intermediary activities for the sale of tourism products of tour operators and tourism services of other tourism business entities, as well as intermediary activities for the sale of characteristic and related services, and which have been duly licensed for travel agency activities".
Translating these concepts into normal language, they can be compared to a warehouse (tour operator) and a retail store (travel agent). The same product can be bought both at the warehouse and in the store, and at the same price. The only difference is that the "warehouse" receives the product directly from the manufacturer or from another warehouse, while the store receives it only from the warehouse. The division of travel firms into tour operators and travel agents occurred in the world long ago, and Ukraine, by the way, was the only country in the entire CIS where these concepts were not spelled out in law, although in practice they were used all the time, just look at advertisements.
So, what changes in the work of travel firms? Those who receive a tour operator license will have the right to work with non-residents - foreign travel firms - to independently form tour packages and submit documents to embassies. They will also bear full responsibility to the client if, God forbid, something happens due to their fault. Travel agents, on the other hand, will sell ready-made tours of Ukrainian tour operators without the right to work with foreign travel firms. Another important detail is that the share of any tour operator in the authorized capital of another travel company cannot exceed 20% - so that monopolists don't get too comfortable.
How many tour operators will remain in Ukraine after the law comes into force? About a hundred, believes Anatoliy Matvienko: “In Britain, you can count about twenty large operators. The rest are agents. One company can have up to 20 agency offices in one city. When I was in Britain, I could not understand which was more abundant: currency exchange points or travel agency offices. In our country, any firm proudly calls itself a tour operator. Some fear that the law is aimed at destroying small travel firms, but if you look into it, today they are 90% performing the function that the law provides for - that is, they are travel agents. The only thing that can be taken away from them is the opportunity to go to embassies and open visas. Many travel firms, by the way, live only on this, and then we hear that Ukraine is a supplier of illegals... Tourism and emigration must be separated - that is, in fact, what the law is aimed at.”
Incidentally, according to data announced at a press conference at the State Tourism Administration on November 19, two “valiant” travel firms - “Svit-tour” and “Intur-plus” - since 2000 had been calmly engaged in forming groups of Ukrainians for “tours” to Mexico with the bright intention of crossing the American border. For this, they charged future “Ukrainian Americans” $7,000 while still in Ukraine and $3,000 already in Mexico. And then - some went on foot, some crawled, some swam. The State Tourism Administration even attracted the attention of the FBI, asking it to look into some travel firms.
Ukrainian travel firms will have to decide as soon as possible the answer to the question “to be or not to be, and if to be, then who?”: they must obtain a new license before April 1, 2004 (let us recall that the law comes into force on January 1).
By the way, regarding “proudly calling themselves.” Today in Ukraine there are more than 740 registration bodies, in which, according to the State Tourism Administration, about 28 “Voyages,” 17 “Globuses,” 12 “Orbits,” etc. are registered. Which “Voyage” you are dealing with, and in general, which of these “Voyages” is more “voyage-like” is a very murky question... Re-licensing, in theory, should rid tourists of the problem of identical names, and twin travel firms will, accordingly, have added worries. The question of whether it is possible to leave firms with the same names, at least in different cities, remains open.
Perhaps the most controversial point in the law is Article 15 - “Ensuring the financial liability of a tour operator and travel agent.” In brief: a tour operator working on the outbound tourism market must provide a bank guarantee in the amount of 20 thousand euros. Tour operators working on the inbound tourism market must provide half that amount (10 thousand euros). Travel agencies must guarantee 2 thousand euros. Insurance guarantee, by the way, existed before. Its amount was $1,000, and it was necessary to provide it when obtaining a license from the State Committee for Tourism. It is difficult to talk about the effectiveness of such a guarantee - firstly, it did not provide the consumer with any compensation for services not provided, and secondly, after the three-year license expired, few bothered to renew it.
Indeed, the amounts are not small, and if we talk about withdrawing them from the turnover of travel firms, they are simply unaffordable. “It is precisely the unclean travel firms that will find this money, but where are we to get it? And anyway, why on earth should we withdraw live money from turnover?!” - these are the words I most often heard from opponents of the law. However, there is an inconsistency here. “Take the money out of turnover and put it as dead weight? Firms that talk about this do not even show such turnovers,” says Igor Golubakha. “The mechanism for providing a bank guarantee is simple: a firm goes to a bank - say, the one where it has its current account. If a company works legally and shows real funds in its account, any bank is interested in such a client and will give it a guarantee. If a firm has neither an office nor money nor anything else, then surely its owners have an apartment. Let them pawn it in the bank - at least then they will be responsible for their actions.”
President of the travel firm “SAM” Sergey Dudka believes that the amount of 20 thousand euros is absolutely insufficient to at least somehow cover the risks of a normally operating operator. “If some heads of Ukrainian travel firms were to read, say, French tourism legislation on consumer protection, they would completely lose the desire to engage in tourism,” comments Anatoliy Matvienko.
If, God forbid, something happens, where will this amount go? According to Anatoliy Matvienko, it will be used for settlements with clients exclusively in the event of bankruptcy and liquidation of firms. “Let me give an example. Based only on the complaints received by the State Tourism Administration, the firm ‘U svit podorozhey’ deceived people out of 100 thousand hryvnias. The most interesting thing is that it has no money: the office is rented, furniture was brought from home, a computer belonging to someone, phones from unknown sources. Authorized capital is zero, assets are zero. And then what? Will a client go to court? Will the firm be declared bankrupt? According to the law, a firm must settle first with the state, second with the workforce, and only then with ‘other creditors.’ And who knows how many of these ‘other creditors’ it had?! It is precisely for such cases that we are introducing this mechanism.” (Some travel firms that sell air tickets are already familiar with working under this system: a bank guarantee of $25,000 is a requirement of the International Association of Air Carriers and Air Agents IATA.)
Will the introduction of a bank guarantee affect the increase in tour prices? “In no way,” says Igor Golubakha, “we are not suicides to raise prices for our products and make them more expensive. The maximum markup that exists in tourism is 15% plus or minus 1-2%. And it will not become larger.” “An increase in price can happen only for one reason - if the cost of licenses is fundamentally changed,” says Anatoliy Matvienko. “Today a license costs 340 hryvnias, and, as far as I know, they are not going to change its cost.”
And in conclusion. According to the "Ukrainsky turistichesky vestnik" (bulletin of the National Tourism Organization), out of five thousand tourism business entities, only 2,600 report, with 500 of them being hotels, sanatoriums, and other accommodation facilities. 49% of the staff of all travel companies work in small travel agencies with a staff of several people - in total, this is 13,500 people. The top hundred tour operators employ 6,500 people and account for 76% of the volume of tourist services rendered. They also provide 96% of all "tourist" revenues to the budget - about 30 million UAH per year. The average monthly contributions of many small travel agencies do not exceed 51 UAH - it turns out that their employees are not even paid the minimum wage of 165 UAH.
By the way, food for thought: two weeks ago, about 50 travel agencies lost their licenses in one day.