The year in the tour and travel business in Brazil ended much as it had been behaving through most of a tortured year—with another bankruptcy of another major tour operator: São Paulo-based Rubia Tur. After the company announced just before Christmas that it would be unable to honor New Year’s Eve packages that included air, cruise and lodging in Asia, things really got perilous, the company’s director, Pedro Cunico, said in a statement. (Rubia Tur did not offer products to North America).
Also according to Cunico, the tour operator’s headquarters in São Paulo was invaded by clients the week before the holidays began. “I was beaten and threatened. I had to call the police because I was scared and cornered,” he wrote. “They were aggressive and threatening people. Not only that, these same people were stopping at the door of my house.”
Cunico, who said, “I am the victim of the crisis” (“The crisis” is widely used as the expression to refer to Brazil’s overall economic condition, which comprises the worst economic recession in a half-century, as well an anemic currency and record business closures), wrote that he “will work from now to repay the agencies that were affected by this operation. Therefore, after three decades of success, we are suspending our activities and concentrating efforts to pay our customers.”
In addition to the shutdown of Rubia Tur, there have been scattered closures of small travel agencies and businesses that interact with tour operators and travel agencies for much of the year. Two months before the shutdown, Designer Tours, a well-known operator based in São Paulo that specialized in upscale tours and incentive travel, closed its doors, explaining in a statement that it was “due to the notorious economic crisis sweeping the country, the high dollar and the euro and the consequent drop of over 50 percent of sales in recent months.” (From Jan. 1, 2015 to Jan. 1, 2016, the Brazilian real fell 33 percent against the U.S. dollar.)
The bankruptcies in the tour and travel business are not unique to the tour and travel industry. According to Serasa Experian‘s indicator of bankruptcies and judicial recovery requests, a total of 627 requests were filed across Brazil in the first seven months of the year. That is the largest such number since the enactment of a law on bankruptcy proceedings in 2005.
What does seem unique to the industry is the impact of the first bankruptcy of note last spring—that of Nascimento Turismo, the second largest tour operator in the country. As was the case with other companies that deal internationally, Nascimento was buying product in U.S. dollars and selling it to clients in Brazil for reales. Eventually, they could no longer pay for the product they were selling at a loss.
Still, the closure of Nascimento was a stunner. An editorial two weeks ago in the trade journal Panrotas said, “Businesses close and open. Sales grow and fall. This is normal in the market. The surprise case of Nascimento, however, that sold until the last minute before the bankruptcy protection, shocked the industry.” It is just possible that once Nascimento capsized, other travel companies took it as a sign that it was time for them, too, to go under.