Coronavirus: Tourism companies facing millions in bad debts

Wednesday, 13 May 2020

Totally Tourism owner Mark Quickfall estimates his company is owed about $50,000 by a company that has gone into voluntary administration.

Tourism operators hard hit by the coronavirus pandemic are chasing millions in debts from travel wholesalers.

Tourism Industry Aotearoa said debts owed by major offshore travel agents were a big issue, and 280 businesses had reported problems with non-payment or delayed payments.

Aoliday NZ Ltd, a specialist in booking activities for the Chinese market, went into voluntary administration in late March owing $3 million to New Zealand tourism businesses.

Totally Tourism owner Mark Quickfall is waiting for the company to pay about $50,000 for scenic flights and cruises.

* 98 per cent of Queenstown hotel rooms empty in April

* Coronavirus: Tourism companies plan to lay off more than 13,000 workers

“It's frustrating and disappointing when there's that loss of trust.

“In this case it was the wholesaler in China who failed to pay the New Zealand operator.”'

Southern Alps Guiding owner Charlie Hobbs is owed a total of $26,000 by two companies for heli-hiking trips Chinese visitors had paid for and completed back in January.

Aoliday NZ's share of the debt is $18,000.

Southern Alps Guiding takes visitors heli-hiking on the Tasman Glacier and is out-of-pocket for trips done back in January.

“The reason it hurts is that half that money goes to the helicopter operator, which I have already paid. I've paid all my bills, but now I need these guys to pay their bills.

“It's only the Chinese ones that haven't paid, all the Kiwi ones have paid their bills.

“I'm just pleased most of my work was not Chinese, because that would have been just disastrous.'

Hobbs said he had threatened to complain to the Chinese consulate in Christchurch over non-payment by another New Zealand-registered Chinese company, and he had still not been paid.

Jucy campervans parked up at its rental base at Christchurch airport. The company has laid off many of its staff as result of the drop in business from Covid-19.

Grant Thornton administrator David Ruscoe confirmed Aoliday NZ owed $3m to New Zealand creditors and said he was trying extract money from a booking agent in China.

Across the Tasman Grant Thornton is handling the administration of the Australian branch of the company, Aoliday Au.

Other tourism operators who have drastically reduced staff to cut costs are also chasing debts.

Jucy rentals acknowledged the problem in a recent email to customers seeking refunds for cancelled trips.

“A number of our wholesale customers have advised they cannot make payments on time or at all.'

Jucy chief executive Tim Alpe confirmed the company was owed “a significant amount” for pre-Covid-19 travel, and they were working on payment plans.

“While there is always a risk, we are confident that we will be paid what is owed, however, [we] anticipate that it may take some time.”

Rotorua's Te Puia cultural centre, which has laid off most of its 160 staff, has been vigilant about chasing up debts and chief executive Tim Cossar is comfortable with the collection rate.

“It's not brilliant, but it's not as bad as I thought it would be.

“Some have been able to run payment terms, and they're paying it off over time.”

Tourism Export Council members include inbound tour operators and chief executive Lynda Keene said she was aware some suppliers and inbound operators had difficulty getting payment from offshore wholesalers.

“Unfortunately patience is required for payments to come through the chain. We understand for suppliers this has been a little unsettling.”