Travel Agents

Liquidator reveals travel agency owed over $350K upon collapse

Huntley Mitchell

Huntley Mitchell

The first creditor’s report into a Kiwi travel agency that went bust has identified “irregular” handling of customer payments.

Guru Travel Limited went into liquidation in November last year after failing to pay back its debts which totalled NZ$370,157 ($354,544), according to liquidator Gareth Hoole of Ecovic KGA.

The Auckland agency, which began operating in 2005 and is owned by Shareen Ramasre, was understood to have experienced cash flow difficulties for some months prior to the appointment of liquidators.

These cash flow difficulties were initially caused by the buy-out of a shareholder and were compounded by the termination of working capital facilities by a bank and a travel wholesaler, forcing Guru Travel to operate under a cash basis, the creditor’s report said.

“Based on the foregoing, the company could not maintain its operations with such cash flow constraints and legacy debt issues in a highly competitive online environment, resulting in such low margins that the ongoing viability of the business was questionable,” it said.

“Hence, the company was unable to meet its debts as they fell due and, on professional advice, the shareholder elected to place it into liquidation.”

A preliminary review of the books and records of Guru Travel by the liquidators found a number of customers had paid for travel or paid deposits to the company, but they had not yet been issued with travel tickets or vouchers.

Furthermore, the liquidators discovered there were no funds held in trust for such customers.

“While investigations are at the preliminary stage, the liquidators have established that, as such, customers’ monies were received, they were paid over to a ticketing consolidator/wholesaler,” the report said.

“The liquidators have been in communication with that party and it appears that the monies paid to them were applied to legacy debt rather than to pay for travel for the paying customer.

“The liquidators consider this to be irregular and will continue to investigate that matter, with a view to consider seeking to void transactions paid to the ticketing consolidator/wholesaler.

“From the discussions held with the recipient of the monies, it appears that they are not holding funds or tickets in effective escrow for any of the customers.”

The report said affected customers have been contacted and it has been recommended to them that where they have travel insurance or they paid for the travel using a credit card, they may have some scope to seek recovery independently via that channel.

The liquidators investigated whether or not Guru Travel was a member of the Travel Agents Association of New Zealand (TAANZ) and, if so, whether there was a bond available to assist customers who have been affected by the closure of the business.

However, TAANZ advised the company’s membership had been terminated more than a year prior to the appointment of the liquidators and that there was no bond arrangement against which recourse could be sought.

Travel companies named as creditors in the report include Helloworld Travel, Allianz and Amadeus.

The liquidators believe that, based on records made available to them, Guru Travel was insolvent at the time of their appointment, but have not yet been able to determine how long the company traded as insolvent, if at all.

“The liquidators will pursue appropriate action against the directors to the extent considered economically beneficial if evidence exists to support such action,” the report stated.

“The liquidators will also review the actions of the director in the payment of customer funds to the ticketing consolidator/wholesaler and whether there are any grounds for action in that respect.”

The report said the liquidation of Guru Travel is expected to be completed within six months from 27 November 2019.

Image: iStock/alexskopje



SEE WHAT PEOPLE ARE SAYING

Leave a Reply

Conferences

PHOTOS: ATE goes off with a bang

If you’re like one unlucky Travel Weekly reporter who has COVID, these pics will help you live vicariously through the conference-goers.

Share

CommentComments

Aviation

Qantas’ new long-haul flights could cost over $18,000

For this price, we’d hope that the flights come with a complimentary mani-pedi and a pet bunny called “Fluffy” to keep us company during the flight.

Share

CommentComments

Returned special events to hit Seoul this month

The Travel Weekly criteria for what makes an event special is whether they have Tim Tams – although we can make exceptions for international events.

Share

CommentComments

Wholesalers

Intrepid debuts its first all-female leadership team

Rumour has it, Beyoncé’s Run the World (Girls) could be heard blasting from Intrepid’s Australia office moments after they announced this news.

Share

CommentComments

Wholesalers

“Bounce back and inspire”: Collette to host key players in Cairns

We’re headed to sunny Cairns this week to rub shoulders with travel’s big wigs at Collette’s annual big bash. See you there!

Share

CommentComments

Hotels

REVIEW: Hôtel La Pérouse offers a taste of classic French resort life

by Ali Coulton

Hôtel La Pérouse exemplifies Nice’s resort lifestyle offering privacy and quiet luxury on France’s Cote d’Azur.

Share

CommentComments

Destinations

Yas Island Abu Dhabi’s new tourism ad names Kevin Hart its chief island officer

Some of the staff at Travel Weekly are trying to become the chief island officer of Australia, but Scomo isn’t returning our emails.

Share

CommentComments

Technology

“Australia is a terrific market for cruising!”: Expedia’s Greg Schulze on how agents can maximise their business

We chatted with one of the big wigs at Expedia during its recent gathering in Vegas. Sadly, he declined our invite to join us for a game of blackjack, but that’s probably for the best.

Share

CommentComments

Tourism

Globetrotting tour operator arrested following drug drop death

The man also auditioned for Survivor in 2019 and featured in an Indonesian TV commercial – just in case the title wasn’t chaotic enough already.

Share

CommentComments

Travel Agents

Travel to make full recovery before end of 2024, says Virtuoso’s Fiona Dalton

Dalton hosted media at Crown Sydney this morning to celebrate Matthew Upchurch’s return to Aus. Our roving journalist managed to take down this story in between courses.

Share

CommentComments

Destinations

Hawai‘i Tourism Oceania celebrates the ‘Month of Lei’ with incredible new famil offer

by Sponsored by Hawai'i Tourism Oceania

This year, Hawai‘i Tourism Oceania is celebrating ‘Month of Lei’ 2022 with a virtual trade event and the launch of a new famil incentive.

Share

CommentComments

Cruise

PONANT announces new 2023 sailing expeditions in the Kimberley

This ship is so fancy that they put ‘le’ in front of the name just to show they’re not messing about.

Share

CommentComments