Asia-Euro Holidays closes suddenly, hundreds left in the lurch

Irresponsible.

That was the criticism Mr Lim Biow Chuan levelled at the owners of Asia-Euro Holidays.

Speaking to The New Paper on Sunday last night, the president of Consumers Association of Singapore (Case) had choice words: "It is a shock to me and I find it disappointing that when you cease business, you just leave a notice for your customers like that.

"This is not the right way of doing business. People are left stranded.

"Granted, businesses may fail and things don't turn out fine, but you have to be more responsible.

"There are passports in their care, deposits that have been made. Right now, people's schedules and travel plans are affected."

Mr Lim said that Asia-Euro should have "looked at what you can do to work with those affected".

"The least they could have done was to call (the customers) and explain the situation.

"I feel that some customers will be able to accept it."

But that is not realistic, said one senior travel consultant who has been analysing the market for some time.

She wants to be known only by her surname Lim as she is not permitted to comment without approval from her company, a major player among the travel agencies here.

"No company in its right mind will (inform their customers beforehand) when they are facing financial troubles. Look at what Five Stars did - they continued to accept bookings the day before their closure," she said.

While the National Association of Travel Agents Singapore (Natas) said there was no indication that the travel agency was going to close, members of the travel industry we spoke to disagreed.

Rumours of Asia-Euro Holidays' closure have been circulating for the past three weeks, they said.

CRISIS

Ms Lim said that the crisis in the brick-and-mortar travel industry has been going on for almost three years now.

Two issues plague the industry - the soaring popularity of online travel services and a worrying oversupply of travel agencies.

Potential customers now flock to online travel booking services such as Expedia or Zuji Singapore.

Flight booking app Skyscanner, for example, replaces the need for customers to go to travel agencies to buy flight tickets.

"You get live updates on cheap deals, you can check prices and book trips while having lunch. These tools cut into travel agencies' profits and provide better service for those who know how to use them," Ms Lim said.

She also estimated that the travel industry has around 70 per cent more than the ideal number of agencies needed for the local market. There are 1,194 active travel agents, according to the Singapore Tourism Board's Travel Related Users' System.

Said Ms Lim: "Right now, the travel industry is too competitive. I am always surprised why one island of people needs so many agencies dedicated to travel."

Due to dwindling demand and an oversupply of travel agencies, small- and mid-sized agencies will look at diversifying their portfolio.

"It is just like what Asia-Euro Holidays did, going into the property business and performing badly there. Diversification carries its risks... and it also means their core business may move away from travel services."

These issues have been known for a while but companies "usually don't harp about it until something bad happens", say industry players.

Associations like Natas are hardly regulators as companies need only to provide a valid travel agent licence and a banker's guarantee to be a member.

"I was actually heartened by the news (of Asia-Euro Holidays' closure) because the industry needs re-looking at," said Ms Lim.

Case's Mr Lim said that the association will do whatever it can to assist those affected.

"For now, we have scant details. We're not sure if the company is already insolvent, because if it is, the customers may have little recourse.

"My advice for those who have bought travel insurance is to start making arrangements for claims."

Other travel agencies that have closed shop

APRIL 2014

The Singapore Tourism Board suspended the licence of travel agency Journey Of Dream, citing unprofessional conduct and failure to provide the travel packages its customers had paid for. The month before its suspension, 97 of its customers reported problems with their bookings after one of the agency's employees went missing.

FEBRUARY 2014

Consumers Association of Singapore urged travel agencies to take out insurance in the event of sudden closure, in order to protect consumers from being left high and dry.

JANUARY 2014

Five Stars Tours abruptly closed its eight outlets, leaving around 3,000 customers in the lurch. Most of its 200 employees then filed unpaid salary claims with the Ministry of Manpower.

JULY 2006

Local travel agency Ananda Travel suspended business after several years in the doldrums, leaving several customers stranded. The agency had to cancel half of its travel bookings and stop taking in new ones. Industry experts pegged the cause of its failure to various unsuccessful ventures here and abroad.

This article was first published on May 24, 2015.
Get The New Paper for more stories.