Ideal Holiday, a financially troubled tour operator, has decided on permanent closure following a meeting on Monday night with the Travel Industry Council.
A spokesman for the company expressed the belief that the company could solve its cash flow problems in about a month, but opted to wrap up affairs following the meeting.
Customers who have paid for the tour operator may choose to transfer to other travel agents, if any are available. Failing that, the travelers may claim a refund for 90 percent of their costs, said the Travel Industry Council.
The company, in financial straits, has been criticized over its failure to send a clear message to clients who had already paid for tour packages.
Ideal Holiday said the problem arose when bus rental companies on the mainland served notice that they wanted payment for service in advance owing to heavy demand emerging from the Shenzhen Universiade on Friday.
The company said it had not collected the fees from clients and couldn’t afford to pay the rental fees in advance, so it decided to shut down on Saturday.
Hau Suk-kei, managing director of SIG Holiday, stepped in on Sunday offering to bail out Ideal Holiday and picking up the company’s tours.
Among 1,100 affected customers, about 800 were to start their tours as scheduled, according to SIG Holiday.
Moments after SIG Holiday stepped in, the Tourism Commission declared the suspension of Ideal Holiday’s license.
“In order to protect the public interest, we decided to have Ideal Holiday’s license removed temporarily,” said Law Shuk-pui, deputy commissioner for tourism.
Hau then withdrew his company’s offer to step in to help the stranded tourists.
He said he will not pick up tours abandoned by Ideal until he is sure that doing so will cause no legal problem.
“SIG Holiday is not to get any money from the tourists; the tour groups still will be arranged by Ideal Holiday,” said Hau. “What we are offering is only to assist Ideal’s service by paying the rental fee for them.”
Law, on the other hand, confirmed the suspension of Ideal Holiday’s license, emphasizing that the company has lost its right to establish any tour groups.
He added, however, the company remains responsible for those customers who already had registered for the service.