Travel agency bankruptcies highlight risk of package tours in Hungary

One of the inherent problems with travel packages is that one can never be entirely certain what to expect. What's even worse is when the tour operator become unreachable overnight after you've given them your money.

That is the current problem surrounding the Horvát Utazási Iroda, as no one from the tour operator can be reached, after they informed approximately 300 would-be-tourists that their holiday plans have been canceled, writes index.hu.

Furthermore, an unknown number of tourists arrived in Croatia to discover that the money they paid the tour operator for their lodging while in Croatia was not passed on, and that they don't have a place to stay, although the travel agency did state they would return the money they received.

Employees of the Hungarian embassy in Zagreb stated that in these circumstances, they cannot help tourists beyond asking them to stay in Hungary and not hope for the best.

But in other tour operator gone belly-up news with a happier ending, insurance company Atlasz Biztosító arranged the return trip for Hungarian tourists stranded in Greece after Szikra Tours went bankrupt, index.hu also wrote.

The agency had a Ft 20 million (over €86,000) insurance policy which is likely to cover the compensation to be paid to clients, said Péter Horváth, a director of Atlasz.

There were 26 vacationers in Greece who booked their holidays through the agency and an additional 250 others who signed a contract with the agency for travel in the future. Atlasz's partners will make sure that as many clients as possible can travel with them, and the rest will receive a full refund. Horváth said the clients are not entitled to any additional compensation.

There are currently 1,200 travel companies in the Hungarian market, including 500 agencies which have to guarantee financial security through an insurer. Of these, 60% have a contract with Atlasz.

Horváth also said that only one similar case occurred the previous year, when 176 clients of the bankrupt Malda Tours were affected. All were compensated from the company's over Ft 40 million insurance policy.

The Hungarian Trade Licensing Office erased Szikra Tours Idegenforgalmi és Szolgáltató Kft from the registry of travel enterprises due to breaking a law. The office is currently investigating the case surrounding the Horvát Utazási Iroda.

In most cases concerning travel agencies going bust, insurance companies will cover the costs if not the headaches associated with the company's demise. These stories just serve as a reminder that while you may get a great deal through a package tour operator, there is an inherent risk involved when you're not the one taking care of all the details yourself.

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