Orbis Travel goes bust

by

An Orbis travel bureau. From a photo on the Studio Reklamy Mars website.

Orbis Travel, Poland’s biggest travel agency in Poland has gone bust. Orbis was founded in Lwow in 1920 by 6 entrepreneurs from Lwow. In 1933, it was nationalised when PKO, a state-owned bank, bought out a controlling packet of shares. By 1939, it had become the dominant travel and hotel business in Poland, with 136 branches, 5 hotels, and 5 million customers. The company was revived after WWII by Poland’s communist government. In the 1950s and 60s, it had a near monopoly in arranging foreign travel for Polish residents and arranging visits to Poland for visitors from abroad.

By 1980, Orbis had become a giant – the company owned: 60% of all hotel beds in Poland, including the prestigious Hotel Forum and Hotel Victoria in Warsaw; 555 coaches; and 373 cars. Each year it looked after the needs of 1.5 million foreign visitors and had a customer base of over 12 million. In 1991, Orbis became Orbis SA. a limited company, and in 1983, its transport and travel agency businesses were split out into two subsidiaries: Orbis Transport and Orbis Travel. In 1997, Orbis SA’s shares debuted on the Warsaw stock exchange. In 1999, the packet of shares owned by Poland’s state treasury fell, below 50%. In 2000, the French international hotel and travel group, Accor SA, acquired a controlling interest in Orbis SA, so completing the privatisation of Orbis.

In January 2010, Orbis SA, sold its loss-making travel agency subsidiary Orbis Travel, for 1 zloty to to the private equity and venture capital company, Enterprise Investors Sp z oo It is being reported that Accor SA had concentrated on restructuring Orbis’s hotel business and that the travel agency subsidiary, operating on as ‘business as before’ basis, was piling up huge losses. Whatever the truth of the matter, 2010 proved to be a disastrous year for Poland’s travel industry. The global financial meltdown, the shutdown of Europe’s airspace following the eruption of Eyjafjallajokull and the gloom felt in Poland following the Smolensk plane crash, all dealt a heavy blow to an industry that was facing heavy competition from the ‘build your own package holiday’ offerings of the low-cost air carriers. Two weeks before the demise of Orbis Travel, the Polish travel agency Selectours had also filed for bankruptcy.

After reviewing the holiday season’s results at the end of September, Enterprise Investors decided to pull the plug on Orbis Travel. On 28 September, Orbis filed for bankrupcty in the Warsaw District Court and on 29 September, after several hundred Orbis customers flew out on their holidays, Orbis travel announced that it had ceased trading and that it would not be in a position to pay for flights and hotel accomm0dation that it had sold to customers. Over a thousand Orbis customers were abroad when the announcement was made, the Mazowian Provincial Government is arranging their flights home financed by Signal Iduna, with which Orbis Travel had taken out a 6 million PLN insurance policy.

After Orbis Travel announced its bankruptcy several interesting aspects of the story were aired in the Polish press. Orbis SA announced that they had been prepared to help Orbis SA through its cash flow problems – subject to the condition that Enterprise Investors provided a similar financial facility – but had been rebuffed. Enterprise Investors responded by accusing Orbis SA of hiding the true state of Orbis Travel at the time that the sale was agreed. Meanwhile Marcin Nowak, writing in Dziennik Zachodny, questions the logic of Enterprise Investments acquisition, perhaps Orbis Travel would have been better off it it has been acquired by Rainbow Tours who had also expressed an interest in acquiring the company.

Orbis SA, have announced that they are withdrawing the licence to use the Orbis name and brand from Orbis Travel. It seems therefore that, after 90 years, this could be the end of Poland’s most famous travel brand.

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One Response to “Orbis Travel goes bust”

  1. Podroznik Says:

    Such a shame. Orbis used to have a branch in New York even, and in the 90’s you could order Polrail Passes from them. They also used to have an office at Okecie airport, and it was equipped with a PKP ticket machine. You could land, buy your tickets, and head for the train station!

    That’s the Orbis office in Bydgoszcz in the photo, btw. :)

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