Out of pocket

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By MATTHEW MCKEW

Activity operators face a double body blow as booking agents postpone or default on debts running into the millions.

Tourism in Queenstown is already under pressure from closed borders, but debts are outstanding from activities run before the Covid-19 crisis.

For several years, many of the town’s operators have come to rely on bookings through the likes of Happy Travels and Peterpans Adventure Travel. These in turn work with Website Travel, which connects customer-facing agents with activity operators.

Website Travel owes about $9.6 million globally and parent company Adventium Technology Group has desperately been trying to raise $12.53m capital over the past few months.

The man behind Adventium is Christchurch-born multimillionaire Andrew Cox, who owns the plush Eichardt’s Private Hotel as part of a separate company.

In an email to operators seen by Mountain Scene, the company admits it runs on a ‘‘negative capital model’’.

‘‘Unfortunately, this model has unwound at such a rapid pace as a result of Covid-19 government-enforced shutdowns that we now need to undertake to raise new capital to repair the balance sheet to ensure that all obligations are met.’’

The email says debts are to be cleared by May, but on May 13 the company contacted operators again to admit the capital’s still not there.

‘‘Australian state, federal and the New Zealand governments have all said they will support the tourism industry, and we have been in an active dialogue with them for some time about assisting Website Travel to get money flowing to the industry.’’

Cox’s appealing to the Queensland government for a bailout, but has so far been met with a stony reception.

A company spokesman says providing they can source the capital, they will in future adopt ‘‘a new process whereby funds will be held in a separate quarantined agent and operators fund, to ensure that an issue such as this does not arise in the future’’.

Website Travel’s not the only booking agent facing problems.

China-focused Aoliday has gone into liquidation, owing tens of thousands to Wakatipu businesses.

Glenorchy High Country Horses is owed $70,000 by Aoliday and more than $30,000 by Website Travel, owner Deana Insley says.

‘‘If this goes on any longer than [next summer], I will be looking at having to close down longer, and reduce staff and horse numbers.’’

Canyon Swing’s just over $50,000 out of pocket from Website Travel, co-owner Hamish Emerson says.

‘‘When we look at it now, it’s a huge amount of money, with no money coming in the door and we are still paying rent and all these things, [so] $50,000 would go a long way.’’

Ziptrek Ecotours boss Trent Yeo won’t say how much his company’s owed, but reveals it’s in the tens of thousands.

‘‘It’s a tough time for all businesses, I just feel like we’re getting pulled down with the Titanic.’’

KJet’s $40,000 down, while Clutha-Southland MP Hamish Walker says he knows one business is $200,000 out of pocket, and another $100,000.

Two huge operators and users of Website Travel, Ngai Tahu Tourism and Wayfare, won’t comment.

Former local Mount Cook Group manager Jules Tapper’s demanding new regulations to require agents to follow Adventium’s proposal to hold funds in a separate account.

He says their business methods to date have been ‘‘sharky’’, spending money that didn’t belong to them ‘‘for their own business purposes’’.

‘‘This is wrong, it’s a rort and it’s got to be fixed.’’

He’s working with Walker on a law change.

Several businesses want agents’ commissions regulated.

They include Pure Glenorchy’s Joel Lamason, who says they’re artificially forcing prices up and pushing New Zealanders out of the market.

matthew.mckew@scene.co.nz