In case of insolvency of the tour operator and travel agent, there is a real risk of damage to the interests of the tourist, as the insolvency may complicate the implementation of the tourist package and at the same time, threaten the fulfillment of the existing financial obligations to the tourist. The purpose of the law is to balance the interests of the tourist as a "weaker party" by establishing preventive mechanisms, for this purpose it establishes a mechanism for ensuring the fulfillment of obligations arising from the insolvency of the tourist enterprise. It is important to assess the likely impact of these regulations on the tourism industry.
Tourism in Georgia is developing at a fast pace, therefore, as a result of imposing new financial obligations for tour operators, there is a high risk that small and medium-sized business entities will not be able to meet these requirements, which is why there is a threat of their liquidation. Within the framework of the present study, new means of ensuring the liability arising from the insolvency of tourist enterprises are evaluated, which will determine the expected positive and negative impact on the tourism sector of Georgia as a result of the adoption of the Law of Georgia "On Tourism".
Directive 2015/2302 "On travel packages and related travel arrangements" adopted on November 25, 2015, is the main document regulating travel packages today. With the adoption of the new directive, a higher standard of protection of the tourist's rights was established, which is in full compliance with the needs of the internal market, and all the gaps that existed within the framework of the previous directive were eliminated. The initiation of the adoption of the Law of Georgia "On Tourism" serves to reflect the standards stipulated by the above-mentioned directive. The fulfillment of the mentioned obligations will have a positive effect, in particular, the changes will contribute to the attraction of foreign tourists, Georgia will become a more popular tourist destination country, as a result of the fulfillment of international obligations, the tourists will feel safe in Georgia, at the same time, tourism activity as a business activity will be established as a very sustainable institution. However, in this process, our country may face some difficulties. Meeting new legal requirements and transitioning to a new reality for countries with an economy like Georgia's will not be a very painless and easy process, since, in many cases, lack of awareness of the issue and, on the other hand, new additional financial obligations represent unwanted news for business entities operating in the tourism sector.
The implementation of European standards, which oblige tourism enterprises to have financial security (deposit) to avoid insolvency, can have both positive and negative economic effects.
Although the legislative initiative has a special purpose, namely the creation of protective mechanisms for the protection of the interests of the "weaker party", since the tourist signs a contract with a stronger party, it is important to assess the economic risk that is expected as a result of the adoption of the above-mentioned legislative initiative.
The objective of the present study is to discuss the new legal mechanisms for fulfilling the obligations arising from the insolvency of the tour operator, as well as to evaluate the positive and negative economic impact of the aforementioned new financial obligations on the tourism sector of Georgia. Among the expected positive effects, the following can be distinguished:
Improved financial stability - the requirement of financial security for tourism enterprises can strengthen their financial stability, which ensures the availability of funds to manage the unforeseen circumstances of the enterprises, reducing the probability of insolvency.
Enhanced consumer confidence - having mandatory financial security can strengthen the confidence of tourists and consumers.
Reduced insolvency risk - the requirement for financial security can lead to reduced insolvency in the tourism sector.
Among the expected negative effects, the following can be distinguished:
Challenges for Small Businesses - Small and emerging tourism enterprises may face challenges in accumulating and maintaining the required deposit.
Potential increase in consumer prices - To meet the mandatory deposit, travel companies may increase prices to maintain profit margins.
Cash Flow and liquidity issues - A deposit requirement ties up a portion of a company's funds, potentially affecting cash flow and liquidity. In particular, small businesses may find it difficult to balance the need for liquidity with the requirement of a required deposit.
The needs of the domestic market determine the development of the legal environment and the international recognition of the tourist as a subject in need of special protection led to the determination of the standards related to the tourist package by international special acts. It is essential for Georgia to share the values on which the European Union is based on the path of European integration. Accordingly, one of the priorities for our country today is to join the international regulations and reflect internationally recognized standards in domestic acts. However, it should be noted that it is equally important to establish both legal regulations and effective mechanisms for their enforcement.
The new legal regulations for the protection of the tourist enterprise (tour agent, tour operator) from insolvency serve the interest of protecting the tourist. The analysis of international practice revealed that insurance, bank guarantees, and the existence of funds are the most effective means of protecting the tourist's financial interests. The choice of the state of Georgia is the result of sharing the best international practices for using insurance or bank guarantees as a financial guarantee for insolvency protection. The present study presents a detailed analysis of the likely results (positive and negative) that are expected for the tourism sector of Georgia after the establishment of regulations related to ensuring the fulfillment of obligations arising from insolvency. Despite the fact that several circumstances presented in the study were negatively evaluated as an expected effect, the priority of the goal of adopting the above-mentioned regulations should be fully shared - to protect the tourist as a "weak party" from financial damage.

References:
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Keywords: Tourism, tour operator, tourist, insolvency, insurance, bank guarantee, economic assessment.
JEL Codes: L82, L83, L89