A total of 408 travel agencies closed down in 2016 and 2017 and the recent insolvency of Terra Tourism is a first warning signal this year, according to financial consultancy firm KeysFin.

Most of the tour operators that closed down had high financial risk as their business plans didn’t take into account market realities and the cash flow management was inadequate.

Competition in the sector is also very high. However, overall, the local tourism sector has seen growing results in recent years. The cumulated profits of local travel agencies reached some RON 163 million (EUR 35 million) in 2017, up from RON 21 million in 2012, according to KeysFin, which estimates that the profits will go up to RON 200 million this year.

The figures take into account the results over 3,200 travel agencies in Romania reported to the Finance Ministry.

editor@romania-insider.com