The Ministry of Tourism presented a conceptual draft of the first ever mandatory Tourism Guarantee Fund. Its purpose would be to compensate travellers in cases of non-fulfilment of commitments by tour operators and to secure the liability of tour operators – as protection against their bankruptcy and insolvency.
„The task of the state and our goal is to create fair conditions for business for the benefit of all interested parties and at national level to realize better protection for the end users of package travel services,“, stressed Minister in charge Dr. Ilin Dimitrov and Deputy Minister Irena Georgieva, who presented the developed concept of the Guarantee Fund. The conceptual draft was created in cooperation with representatives of the Bulgarian Actuarial Society and presented to the organizations representing the segment of tour operators in the tourism sector – Association of Bulgarian Tour Operators and Travel Agents, „Future for Tourism“, Association „Tourism“ and Bulgarian Association of Travel Agents.
One of the priorities of the Ministry of Tourism in the past months was the continuation of work on the development of a Guarantee Fund model to ensure the liability of tour operators according to Directive /EU/ 2015/2302 of the European Parliament and of the Council of November 25, 2015, including the development of proposal for a conceptual framework for a compulsory guarantee fund.
„This fund is a small step in the direction of brightening the sector, which is part of our policy,“, Minister Dimitrov said, adding:
„This is yet another promise fulfilled of the priorities we outlined when the caretaker cabinet took office, it was important to make a start because for years there has been talk about how important it is for businesses to have such an instrument as an element of national protection against the insolvency of tourism organisations.“
The creation of 3 pillars to build on the existing collateral regime through insurance with the introduction of a mandatory Tourism Guarantee Fund (TGF) to complement and provide additional national protection against insolvency of tour operators would be a realistic and relatively easy to build mechanism in the assessment of experts. With such a structure in place and by introducing appropriate mechanisms and additional requirements – including for the prior and ongoing monitoring of the activities and accountability of package tour operators and the adequacy of the compensation they provide – the necessary consumer protection arising from the requirements of the Directive could be ensured at national level in the reasonably short term, Deputy Minister Irena Georgieva said.
It is necessary to rearrange the business model and the mode of operation and regulation of the activity of tour operators, which will lead to an improvement in the quality of the services provided and better protection for consumers, she stressed.
The initial mathematical models show that in order to accumulate a financial resource in the fund, the contribution of the tour operator agencies will be in the amount of 0.1% of their turnover, which at this moment will mean a contribution of between BGN 80 and BGN 1,000. The idea is that the fund will cover the payment of benefits above the limit of liability under the insurance in cases of bankruptcy, in case of temporary insolvency (liquidity problem) and in case of possible unavoidable and extraordinary circumstances.
„The introduction of a functioning guarantee fund is a serious decision that requires legislative changes and close future cooperation with business representatives,“, Georgieva stressed.
Given the fact that the introduction of a guarantee fund requires an amendment to the regulations and the existing institutional framework, after drafting a proposal for legal changes, a broad public discussion with all interested parties and institutions is foreseen.
