A New Zealand rich lister whose travel empire owes millions to tourism operators is lobbying for a Queensland Government bailout over debts racked up before coronavirus shutdowns.
- Website Travel owes about $9 million to tourism operators nationwide
- Tourism Minister Kate Jones says she expects the company to pay the Queensland tourism businesses for the work done
- The QTIC says the issue highlights the need to reform the way the industry funnels money from customers to operators
But Queensland Tourism Minister Kate Jones said Website Travel group and its owner Andrew Cox should pay up, after already receiving more than $1 million in interest-free loans from the Government’s COVID-19 jobs support scheme.
Website Travel, which owes about $9 million to tourism operators nationwide, has asked the Palaszczuk Government to expand its loans program so it can pay Queensland operators owed about $5 million.
Josh Wilde said his sail charter business, Prosail Whitsundays, was out of pocket more than $100,000 and in danger of going to the wall.
“It’s a pretty hard pill to swallow,” Mr Wilde said.
“To us, as three-vessel operators, that’s huge money.
“I certainly would have thought that the Government assistance should be going to the small businesses that are owed the money.”
Julie and Asher Telford, owners of Red Cat Adventures at Airlie Beach, said they were owed more than $160,000 from tours in early March.
Ms Telford said their last tourist groups “went out, saw Whitehaven [Beach], they went snorkelling, they did everything that we promised”.
“Obviously we didn’t get paid and that was financially devastating for us,” Ms Telford said.
Mr Telford said it was “pretty heartbreaking … it’s one-and-a-half-year’s worth of fuel for one of our boats”.
“We’ll get through it, but it’s very disappointing to have to dip into your company savings and personal savings to get out of a situation where somebody else owes you that money,” Mr Telford said.
The debacle has prompted the Government to consider restoring laws requiring money owed by distributors like Website Travel to be kept in trust to protect tourist operators.
Website Travel suspended all payments last month, blaming the pandemic for bringing “adventure and experiential travel to a complete standstill”.
But some operators told the ABC they were owed for services to tourists who paid as far back as January.
Mr Cox told operators by email last month the business would introduce a new fund to “segregate all agent and operator funds that flow through Website Travel”.
‘We expect you to pay,’ Minister says
Ms Jones said it was “deeply concerning to me to hear that tourism businesses and operators who performed work for Mr Cox’s company before COVID-19 haven’t been paid”.
“If you’re a tourism business that is hanging on by your teeth right now, to have a blow like this where you’re not getting paid for work that was done before COVID-19, it’s just a rip-off,” Ms Jones said.
“My message to Mr Cox is very clear — we expect you to pay these tourism businesses for the work that they have done.”
Ms Jones said the Government’s door remained open but “the fact that Queensland Treasury has now provided financial support to Mr Cox only raises the argument that he absolutely should be paying these tourism operators first”.
She said to get funding from Queensland Treasury, “he would have had to demonstrate that he was an ongoing concern, and that he could pay back the loan”.
“There is as I understand it, no claims by Mr Cox that he is going bankrupt, that he doesn’t have the funding to do this, and we expect him to pay,” she said.
Cox family fortune worth about $94m
Mr Cox is a former owner of the Melbourne Rebels rugby team and since 2015 has been on the rich list in his native New Zealand, where his ventures include a $12,000-a-night luxury yacht and penthouses.
NBR magazine last year put his family fortune at about $94 million.
He was buying up other travel businesses — including Adventure Tours Australia — as recently as December.
In a statement, Mr Cox said “to suggest that the non-payment of obligations is not to do with COVID-19 is simply wrong — it is all about COVID-19”.
He said Website Travel had been talking to Ms Jones’ office since mid-March and was aware of challenges “well before we froze the marketplace”.
“There is a problem that needs to be fixed and the Government has an opportunity to help solve it,” he said.
Mr Cox said all operators who submitted voucher claims before March 15 had been paid in full.
The shutdown of the tourism industry began on March 23 with the closure of non-essential businesses, followed by interstate travel bans and home confinement rules.
Mr Cox said the company would work to pay all others “100 cents in the dollar” but that the company needed to “manage our capital very carefully”.
He told the ABC that “like all tourism businesses, we have been significantly impacted by the COVID crisis and the shutdown of all domestic and international travel”.
“We’ve got no further comment to make on timing or process.”
Mr Cox previously planned to repay debts in early May by raising $12 million from investors by the end of April.
Mr Telford said he was “very worried now it’s past the due date”.
Mr Wilde said if the Government were “out to try and get them to pay, that’s the best thing I’ve heard all month”.
“I certainly wasn’t holding very high hopes for any money coming from this company,” Mr Wilde said.
‘Worse possible time’
Queensland Tourism Industry Council (QTIC) chief executive Daniel Gschwind said the affair had hit operators from Cairns to the Gold Coast “at the worst possible time”.
“There’s no income and to have money owing from before this really hit — for services already rendered — that’s a double blow for these businesses,” Mr Gschwind said.
Mr Gschwind said it highlighted the need to reform the way the industry funnels money from customers to operators.
“We don’t know exactly what has gone wrong here but something has clearly gone wrong,” he said.
Ms Jones said the Government was “very open to sitting down, to introduce industry standards around how we can protect operators on the ground, who are actually providing the services to tourists”.
“I do think that this case could draw out broader concerns about how companies structure themselves and whether there is work that we can do,” Ms Jones said.