Importance Many tourism companies have gone bankrupt and ceased their operations in recent times. The article considers a relevant issue of managing tourism companies' risks and using advanced mechanisms for this purpose. We describe a stress testing method that is actively applied nationwide and abroad for early risk identification in the banking and insurance sector. However, stress tests are not widely utilized in the Russian tourism market as a tool for assessing probable damage and loss. Objectives The article investigates whether it is possible to apply stress tests in evaluating sustainability and reliability of tourism companies, and outlining recommendations on the ways to implement the advanced method as part of tourism regulation. Methods Conceptual provisions of risk management, proceedings of leading Russian and foreign scholars on risk management constitute the methodological underpinning of the research. The scenario analysis is applied as the main approach to stress testing in tourism. Results We suggest stress tests should be conducted in tourism companies using the worst case scenario. Stress testing should rely on a simulation and balance model that envisages effects of macroeconomic and social indicators on key indicators of tourism companies, including those describing insufficient flight occupancy, untimely payment of salaries to tourism companies' employees, amounts due to hotels, airline companies and banks. It will help evaluate aggregate losses and capital deficiency. Tourism companies will be more protected from bankruptcy, and tourism companies and tourism regulator will implement an effective system for monitoring tour operators' financial stability. Conclusions and Relevance We present materials in our article that may be used for further researches on risk management. The materials may prove useful and helpful in setting up a risk management system in tourism companies.
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