One of the country’s biggest hostel groups has gone into administration, becoming the latest travel provider to succumb to financial collapse due to the global pandemic.
Tourism Adventure Group (TAG) went into administration last month, and was set to hold its first creditors meeting on Wednesday.
TAG operates Base, Nomads and United hostel networks across Australia and New Zealand, as well as a spate of bars, Fraser Island tour groups, Mojo Surf Camps and Sydney Iconic Tripz.
TAG managing director Dan Bunning told The Australian the current COVID climate, along with the collapse of the backpacker trade and the loss of JobKeeper left the business no choice but to try and restructure.
“We are working with key stakeholders including landlords, employees and trading partners to accept the current circumstances and face the reality of having to reset the business in the midst of this pandemic, to ensure it is well-positioned and on a strong footing for the future,” he said.
Bunning said the group was “highly profitable” before the pandemic, employing 600 full-time staff and celebrating a $150 million turnover in 2019.
Liam Healy and Quentin Olde of Ankura were appointed administrators to the company’s Australian operations in June, according to The Australian.
TAG’s New Zealand operations are not in administration.
Healy told The Australian the administrators were currently scoping out the state of the company with its directors, shareholders and stakeholders to consider the options available.
“In the meantime, we are continuing to trade the businesses and negotiate support from key stakeholders in these difficult trading conditions,” he said.
“TAG and its directors have support from its bankers and other stakeholders, and are working with the administrators on restructuring proposals which are focused on keeping the group together and operating into the future”.
Travel Weekly has reached out to TAG for comment.
Featured image source: Visit Brisbane