Thousands of Russians stranded abroad after tour operator fails

MOSCOW (AFP) - Russia is striving to bring back nearly 16,000 tourists stranded abroad after the latest in a string of travel companies failed amid strains over the crisis in Ukraine, tourism officials said Monday.

With Western sanctions threatening to tip Russia's ailing economy into a recession and the value of the rouble taking a beating, the number of Russians travelling abroad has been cut by as much as half, according to industry sources.

The Labirint (Labyrinth) company announced Saturday it had halted operations, leaving 27,000 Russians "abroad without return tickets," the Tourhelp service of Russian foreign tour agencies said Monday.

Officials said that after making emergency arrangements they had been able to bring a third home, cutting the number stuck abroad to just under 16,000.

"We hope to have everyone home by the end of the week," the acting head of the national tourism agency Rostourism, Mr Oleg Safonov, told journalists.

Labirint is the fourth Russian tour operator to go bust in the past three weeks, stranding more than 50,000 abroad, as jitters over the conflict in Ukraine have led to a slide in bookings for overseas trips.

"The negative political and economic situation has influenced the number of bookings" and a drop in the value of the ruble "has hit buying power" of Russians, Labirint said in a statement.

Tour firms which had reserved a large number of seats on charter flights found themselves in difficulty when demand dropped.

Tourism officials said Labirint had built up a debt of 1.4 billion roubles (S$48 million) owed to the unit of national airline Aeroflot, which carried its clients.

While Western sanctions have yet to have a significant direct impact on the Russian economy, the Ukraine crisis and the threat of punitive measures has hit the value of the rouble, which has slid by 11 per cent from a peak last September, and clouded sentiment.

Even before the Ukraine crisis, economic growth had nearly stalled and the country was threatening to fall into recession.

The Russian Tourism Industry Union said that its members were saying tourism departures and arrivals were down from a third to half.

Mr Safonov said Rostourism's unofficial data shows the number of Russians travelling abroad has dropped between 15 and 30 per cent, depending on destination, and the number of foreign tourists visiting Russia is down by as much as a fifth from last year.

"We worry that this is only the beginning and that there will be a domino effect," Rostourism spokeswoman Irina Shchegolkova said on Echo of Moscow radio.

She said Russian tourists in Greece whose hotel stays had not been paid for by Labirint were being allowed to remain for the time being, but some of those in Turkey were being turned out of their rooms.

Turkey's Dogan news agency reported that 44 Russian tourists have been sleeping at Antalya Airport for three days because they can not afford to buy return tickets and were appealing for government help.

Russia's NTV channel aired a video of Russian tourists throwing furniture in the lobby and fighting with security guards after being turned out of a Turkish hotel where they had expected an all-inclusive holiday.

Mr Safonov had warned earlier in the day the agency would create a blacklist of firms that mistreated Russian tourists who ended up in such situations.

"Unfortunately, we encounter cases where foreign partners turn out tourists and treat them very harshly... so we plan to create a list of such partners with whom it will be recommended to avoid doing business," he told the Interfax news agency.

He blamed a "crisis of confidence" among Russia's foreign partners who are demanding advance payments due to fears they may not get paid as aggravating the situation.

Russian Prime Minister Dmitry Medvedev lashed out at tour operators and ordered the relevant authorities to monitor their finances and close those found to lack sufficient reserves.

"All these tour agencies are operating like pyramid schemes... and then say: 'Oh sorry, we have too few clients'," Mr Medvedev said according to his office.

Russia's federal investigative committee said on Monday it was probing Labirint and another tour operator that failed last month, Neva, for possible fraud.

EU sanctions have so far forced the national flag carrier Aeroflot's low-cost airline Dobrolet to suspend operations because of its service to Crimea, seized from Ukraine by Russia in March.

The controversial flights to the strategic Black Sea peninsula prompted Western leasing companies to cancel contracts for the carrier's Boeing aircraft.

Join ST's Telegram channel and get the latest breaking news delivered to you.