Lies, deception and deceit – the story of the Excite Holidays crash
By Bruce Piper
Another Christmas holiday period – another huge travel story.
The pattern started just before Christmas 2017, when the industry was stunned at the announcement of Helloworld Travel’s acquisition of the Magellan Travel Group.
A year later, in December 2018, there was the massive collapse of Bestjet Travel Group, just six weeks after the business had been purportedly sold to McVicker International by founder Rachel James.
And now 12 months on, the industry is faced with the collapse of Excite Holidays, which by all accounts is going to have a huge effect on many agents who believed the reassurances provided by Excite, despite its withdrawal from the AFTA Travel Accreditation Scheme and insistence that it did not need to be ATAS accredited.
The Excite saga still has some way to play out, with the first creditors meeting set for next week in Sydney. At this stage the scale of the collapse is unknown, but scores of agents have contacted travelBulletin to advise they are likely to be impacted, with some hit by chargebacks worth up to $35,000.
There’s also likely to be lots of “I told you so” in the industry, with some groups having had Excite Holidays on stop sell for some time.
However it should also be noted that Excite was preferred by some travel agency networks until quite recently, so consultants quite rightly can ask who they should believe. Although Excite did not make any public statements about its withdrawal from ATAS, the company certainly denigrated the scheme to individual agents in the wake of its pullout, insisting it was not relevant.
AFTA has been sounding a warning about non-ATAS accredited businesses at recent travel industry conferences, dropping heavy hints that even in the case of “voluntary withdrawals” as was the case with Excite Holidays a year ago, sometimes there can be more to the story.
I can confirm that Travel Daily and travelBulletin have been heavily restrained in what we have been able to write about Excite, having been under threat of court action by the highly litigious company for more than 12 months.
What is becoming clear as the dust around the collapse starts to settle, is that Excite had been in trouble for some time. The Administrators, KPMG, have confirmed meetings with Excite’s directors as far back as 28 November 2019 to discuss cash flow issues and options for restructuring the business. The timing of those first talks also ironically coincided with Excite Holidays being named “Wholesaler of the Year” in what must now be a heavily tarnished industry awards program. Shortly thereafter the company announced the imminent rollout of a major platform upgrade, including the addition of an air module scheduled for early 2020. It’s apparent that throughout November and December Excite Holidays continued to promote heavily to the industry, including running an incentive to encourage more bookings.
It now appears likely that much of the money taken in by Excite has not been passed onto accommodation providers, who quite rightly are cancelling the bookings.
Incredibly, Excite continued to take new bookings right up to 8 January, all the while brazenly telling an avalanche of those whose clients turned up to find their reservations were unpaid that they should simply get customers to pay again and lodge a “service complaint” requesting a refund from Excite.
By all accounts the staff were repeatedly reassured that things were going well, with local BDMs given an extra week’s annual leave while at the same time being told to just leave their phones off so they didn’t have to deal with complaints from agents.
The KPMG Administrators have a big job ahead of them, with Excite’s Directors operating an extensive web of companies both in Australia and offshore. There’s believed to be a “joint venture” including some ownership of a hotel group in Greece, and the company had an office in Bangkok as well as sales operations in the UK and North America. The Excite website seems to indicate that agents were dealing with a Singapore-based company, but Excite’s actual invoices included the ABN of an Australian-based company called Global Travel Specialists Pty Limited – just one of five local entities which are now the subject of the Voluntary Administration.
And incredibly in recent days it has emerged that Excite’s founders were in the throes of establishing yet another venture called TravelYou.com. Not to mention their previous experience with the collapsed advertising agency Adlux, which ceased trading in 2014 owing $3.5 million, just two months after Excite MD Nicholas Stavropoulos stepped down as CEO. Excite Holidays, co-founded by Stavropoulos and George Papaioannou, was a major Adlux creditor, owed more than $850,000.
Next week’s creditors’ meeting is likely to be a mixture of tragedy and outrage as further details of the farce are unveiled – see the February issue of travelBulletin for further coverage of the Excite Holidays collapse.