The founder and CEO of an Australian restructuring advisory is urging struggling travel companies to urgently seek financial advice before JobKeeper is wound back.
Last month, Mackay Goodwin was appointed to handle the voluntary administration process of JMW Travel, which traded as Victorian travel agencies Helloworld Monbulk and Helloworld Bentleigh, as well as Nexus Business Travel.
Mackay Goodwin chief Domenic Calabretta is worried the company is only the first of many in the travel industry who will find themselves in a similar situation by 28 March, which is when the federal government’s JobKeeper payments are scheduled to end.
“Sadly, we know there will be more travel businesses experiencing hard times, but acting now and seeking help means it won’t necessarily mean the end of the road,” he said.
“There are a couple of routes open to struggling travel businesses if they act early and as soon as possible.”
Calabretta said the first step is to have “a good handle” on your financial position.
He also noted there are several options available to affected businesses, including voluntary administration or a small business restructure.
“Having the peace of mind that the restructuring expertise is there allows company directors and managers to focus on rebuilding the company and delivering an ongoing growth strategy,” he said.
“Impacted companies should seek help now and not wait until JobKeeper dries up.
“Employee entitlements such as redundancies will need to be covered where a business may need to liquidate, so seeking help should give companies the peace of mind that an experienced financial adviser is supporting them.”
JMW Travel director Jennifer Watson said she didn’t want to leave it too late and sought help as soon as possible.
“We wanted to ensure we were doing the right thing by our staff and by our creditors,” Watson said.
“We are continuing to operate whilst in voluntary administration, and we’re focusing on getting back into the business of sending our valued customers on the holidays they have been missing. We are looking forward to the post-pandemic future.”
At the same time, Calabretta is calling on the government to extend JobKeeper beyond 28 March for the travel and hospitality industries, “which should be considered separate from other industries”.
“Affected companies will need at least four weeks to cover redundancy provisions for staff unless a solution or extension to JobKeeper is delivered,” he warned.
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