Suppliers May Not Be Able to Meet Payments During Economic Crisis

Published by June 19, 2009

According to eTravel Blackboard, suppliers and tour companies could find themselves unable to meet short-term financial obligations including deposits and final payments to hotels and other travel suppliers. These difficulties have risen because of today’s economic challenges, particularly the reduced availability of credit. This may only be temporary if the supplier is otherwise healthy, however, extra care is required to help agency clients ride out the global economic storm.

Some travel insurance policies offer coverage benefits for financial default.  This does not necessarily mean bankruptcy, it can apply when there is a total cessation or complete suspension of operations due to insolvency.  This benefit may not be available if the travel insurance is purchased through the tour operator.  There may also be a limit on the amount if time from the initial deposit that the traveler will qualify for financial default coverage.  Always refer to the certificate of insurance for details.