Thursday 23 April 2009

The Vacations in Hell

Conquest Vacations Inc. in Canada announced on April 15, 2009 the cessation of its tour operations effective immediately. They did this because they didn’t have enough money to pay the resorts and airlines that they were supposed too despite the fact that they had already been given the money to do so by their customers.

What this meant was that all those people who booked their vacations with Conquest for their vacations in hotel/resorts and paid for their flights by giving the money to Conquest were actually at the hotel/resorts when Conquest ceased operations. The hotel/resorts were now demanding that the vacationers pay again before being permitted to leave the premises. And to add insult to injury, that had to pay for their return airfare again also.

Canadian tourists staying at some hotel/resorts in Mexico were treated in a brutal fashion when Conquest Vacations collapsed. They were reportedly denied access to their rooms, forcibly confined to the hotel/resort, and threatened with police intervention unless they anted up thousands of dollars in payments for vacations they knew they had already paid for.

When Handley, (one of the vacationers) who booked her vacation in Punta Cana, Dominican Republic, with Conquest Vacations, approached staff at the Hotel Grand Oasis, she was told to pay $1,000 (U.S.) or she wouldn't be able to leave the country. The hotel people told her that if she didn't have enough money on your credit card, “that’s too bad."

Handley was just one of hundreds of former Conquest Vacations customers arriving home from popular vacation destinations in the Dominican Republic and Mexico armed with stories of hotel staff no longer able to speak English, threats of jail time and the seizing of passports if thousands of dollars of extra charges went unpaid.
Toronto native, Lindsay Watson was vacationing with her friend, Luther Mallory, in Cancun, Mexico, when she received a letter under her hotel room door. The letter told her that she was expected to pay $1,256 for her stay at the hotel, plus airfare, before checking out. Watson and Mallory immediately approached the hotel manager of the Golden Parnassus Hotel. He told them that if they didn't pay the full amount that he would call the cops and they would go to jail.

What an interesting dilemma that would have been if she and others were then arrested and put in jail. What would be the crime they would be charged with? Since they hadn’t committed a crime, would the Mexican courts order that they were to be put in a debtor’s prison? In doing that, it would be a marketing disaster for the travel industry in Mexico that would take years to recover from.

Watson and Mallory then did what any responsible Canadian vacationing outside Canada would do: they called the Canadian Consulate in Cancun to ask for advice and assistance. The Consulate’s response was, “Pay the amount and just do what they say.” How simple it is for some consulate nerd to say that. The nerd wasn’t ripped off like those who sought help from the consulate.

When about 50 Conquest customers had gathered in the hotel lobby, police and security guards arrived to prevent anyone from leaving. Some guests said their luggage and passports were taken away and they were told they couldn't get them back unless they paid thousands of dollars. I should add that it is illegal to take a person’s passport away from them. The hotel/resort’s Conquest representative was not aware the company had gone out of business and quickly disappeared after learning of its demise.

For the Gzik family of Brockville, Ont., no statement of concern will make amends for the "vacation from hell" they went through at the Hotel Grand Oasis in Cancun.

"When we tried to speak to the hotel staff to explain our situation, suddenly no one spoke English any more," said Gary Gzik, 45, who paid $4,400 (Canadian) through Conquest for the week-long vacation with his wife Jane, daughter Hannah and son Evan. But to leave the hotel yesterday morning, Gzik says he had to pay an additional $3,000.

AndrĂ© Lemay, the press secretary at Foreign Affairs and International Trade Canada, said: "We have apprised local authorities of this situation and of complaints that Canadians are being threatened. They Mexican authorities said that they were taking the Consulate’s concerns seriously. I doubt that.

Oasis Hotels & Resorts (whose head office is in Spain) issued a statement blaming Conquest for the situation the guests were facing at some of their hotels. "Conquest never paid us. The result is that consumers have been enjoying vacations at our hotels and resorts – sleeping in our beds, eating our food, drinking our beverages – which were never paid for. We have no recourse but to require payment prior to the traveller's departure. We completely understand that this situation is upsetting to everyone involved and we regret the impact it may be having upon people's vacations."

I understand the feelings of the resort firm. If some of these vacationers had booked well in advance, their money should have been forwarded onto the resorts. There is no excuse for any tour operator to be holding onto their customer’s money after they have booked their customers into a resort and arranged for the flights. I strongly suspect that Conquest was probably using the money to pay for previous customer’s vacations.

These reports raise some troubling questions. For instance, vacation trips booked through tour operators like Conquest are backstopped by the Travel Industry Council of Ontario (TICO), which is mandated by provincial law to protect consumers. What did TICO do to ensure that hotels in Mexico got the message that they would be paid in the wake of Conquest's collapse? On its website, TICO says that it is "aware" that some travellers are being asked for payment and is attempting to resolve the issue. How? And when were their first contacts made with the hotels?

In the Ontario Legislature, Harinder Takhar, the minister responsible for TICO, lamented that there has been "some inconvenience" for tourists, but he also praised TICO for moving "aggressively" to protect them. And in Ottawa, a spokesperson for Foreign Affairs Minister, Lawrence Cannon said there had been no "direct" complaints about the consulate's inaction.

Those answers aren't good enough. Questions about the handling of the collapse of Conquest by both federal and provincial authorities ought to be pursued by the opposition parties and the media alike.

Ontario's government is being blamed for what opposition parties say was "an absolute failure" of its regulatory body to protect travellers stranded by Conquest Vacations.

The regulatory body is now trying to help Canadians who were told they had to pay for their hotel rooms booked though Conquest. Anything done after the fact won't make up for the stress of being stranded and then bullied by Dominican Republic and Mexican hotel/resorts and the police demanding payments. Opposition Leader Bob Runciman says the government needs to be more forthcoming about why the agency didn't warn people and must lay out a plan to ensure it doesn't happen again.

Consumer Services Minister, Harinder Takhar says the travel council had been trying to help Conquest deal with its finances. New Democrat Peter Kormos said the government had an obligation to warn consumers as soon as the Travel Industry Council of Canada discovered Conquest was having financial troubles.

I contacted TICO and asked them if anyone wishing to vacation out of the country via a tour operator, can they call TICO and ask if the tour company is having financial problems. I was told that would not be possible even if they knew the tour operator was having financial problems. The reason is obvious. If such information became public, the tour company would no longer get business and subsequently would go bankrupt.

Travellers in Ontario can claim a refund from a special fund that was created for their protection if they booked with a travel agency or tour operator that is registered with TICO.

While there is no such fund in Alberta, the province does offer protection for people who paid for their vacations with a credit card as do everyone in Canada who used their credit cards to pay for their vacations. Albertans who ended up paying for their vacations twice when Conquest Vacations Inc., shut its doors may be able to reclaim their money back if they booked their trip with a credit card. If they paid by cash or money order or cheque, they can kiss their money goodbye if they arranged for their vacations through a tour operator or travel agency that is not registered with TICO or a similar protection body in B.C. and Quebec.

Cam Traynor, a spokesman for Service Alberta said; "Anyone who has paid with a credit card for a service or goods and they don't receive that, they can simply — within 30 days of not receiving what they paid for — write to the company and cancel the contract and the company is required to give them their money back. If the company doesn't give the money back, then their credit card company is required to give them their money back." Traynor said that the Alberta government considered the kind of fund that protects travellers in Ontario, but decided against it. British Columbia and Quebec however have a government sponsored body like TICO to protect its consumers.

Unfortunately, Cuban resorts have been ordered by the Cuban government to not accept the guarantees of TICO that the bills will be paid by TICO. Further, many hotels around the world also refuse to accept TICO’s guarantee that the bills will be paid by TICO. They will make their customers pay the money again if they didn’t get the money from the failed travel agency or tour operator.

The names of hotels that treat their guests the way Hotel Grand Oasis in the Dominican Republic and Mexico and the Golden Parnassus Hotel did to their guests, should be posted on the Internet as undesirable hotels. It seems to me that when a hotel accepts a guest knowing that the guests have prepaid their stay with a travel agency, they should not harass the guest into paying again. They should make a claim against the travel agency or apply to TICO for the money.

Years ago, I gave money to a travel agent for return airfare to Hawaii. He gave the airline an NSF cheque. While I was in Hawaii, the airline told me not to worry because they had it on record that they had confirmed to me that they received his cheque. It was only later that it was determined to be NSF. The creep and his wife lost their licence as travel agents and he lost his job also as a JP because of my complaint I filed against them. The government made good the loss.

Is it a good marketing tool to threatening guests with jail or should the resort work this problem to its advantage and make their resorts stand out in people's minds as being run by decent people? I wonder if even one manager considered explaining the situation to every guest who booked with Conquest that Conquest had not paid their bill but that didn’t matter as the resort still considered every one of those booked by Conquest as their guests. Are any of these resorts that close to going broke even if 25% of the guests are from Conquest, that the other 75% who weren’t, won't cover their losses for the week? They have done much more harm to their business and their pocket book themselves than Conquest has done to its customers.

Had they treated the Conquest vacationers with respect, and not hounded them for the money, you can be sure that those Canadians would have returned to those resorts time and time again. Now they will never return to those resorts. Hotel Grand Oasis and the Golden Parnassus Hotel made a horrendous marketing blunder that will cost them dearly. I did a survey after reading the stories about those hotels and only one in thirty-five said that they would still go to one of those hotels. Those hotel/resort chains’s blunder will cost those hotel chains very dearly over the years. The loss of business will far exceed what they would have lost if they hadn’t demanded that their guests pay again.

Canadians were horrified in the manner in which the hotel chain treated the guests who had booked through the failed Conquest Vacations. Those persons who booked through that agency were protected by a government operated agency which would have paid the hotel chain the money they didn't get from Conquest Vacations. There were procedures they could have followed to receive the money from the government agency but instead they chose to seize the passports of their guests and forbid their guests from leaving until they paid them the money. I should add that seizing their passports in order to obtain money from the passport holders is illegal in all countries.

There are thousands of Canadians who will no longer even consider going to one of those hotel/resorts because of the conduct of the hotel managers in the Dominica Republic and in Mexico. The names of hotels that treat their guests the way your hotel chain did to their guests; are in my opinion, undesirable hotels to stay away from.

It seems to me that when a hotel accepts a guest knowing that the guests have prepaid their stay with a travel agency, they should not harass the guest into paying again. They should make a claim against the travel agency or the government operated agency that protects the travellers and the hotels they go to.

Declining air travel and an unforgiving financial sector will increase the risk of more airlines going under in 2009, the head of the International Air Transport Association said yesterday. Last summer, Zoom Airlines, which operated low-cost tours to Europe, was also forced into bankruptcy.

Instead of putting pressure on TICO and the Canadian Consulate, perhaps a finger should be pointed at the resorts themselves. It sends a chilling message to future vacationers when resorts are using such strong-arm tactics as forcible confinement and locking out their customers. Resort management must also be aware that the Conquest Vacations situation had nothing to do with the vacationers, and a ‘smart’ resort manager would be aware of TICO to deal with the financial burden (this couldn't have been the first time). As vacationers we take for granted that our trips to foreign countries provide some protection when in reality it is not always true. Given the many problems that Mexico has given to Canadian vacationers in the past, it is time to reconsider going there at all.

If you book through a travel agent, and, in the event the travel agent or tour operator such as Conquest or an airline such as Jetsgo and Zoom go belly up, you will receive a refund, regardless of how you paid. If you booked directly with the tour company, you must rely on the credit card company to give you a refund. If you book your travel directly with the airline or hotel and they fail, you again can rely on the credit card company but if you sent them a cheque or a money order; then go to TICO or the other similar government entities in B.C., and Quebec. If you are in another province, then kiss your money goodbye.

Since there's no ‘warning card’ equivalent under the TICO system, Ontario premiere, McGuinty said he wants a quick review of the agency to see if it needs more powers to protect consumers. "That's the issue: at what point do we kind of call the game and at what point do you simply hold up a warning card, so the public is made aware there may be some challenges associated with this business?"

The Ontario Travel Council has said it's trying to help Canadians who have been told they must pay for their hotel rooms after Conquest closed its doors last week because of economic problems, leaving many of its customers in the lurch.
The New Democrats scoffed at McGuinty's defence of TICO, and said the agency has no integrity whatsoever and is nothing more than an apologist for the weak and bad players in the travel agency industry.

"Don't tell me about a death sentence for the travel agency, tell me about the incredible injustice to travellers who paid thousands of dollars to go to a resort and find themselves stranded, extorted and pushed around by local cops," railed NDP critic Peter Kormos. He added, "I think TICO has demonstrated itself to be a total failure when it comes to consumer protection." The Progressive Conservatives also said TICO had failed consumers and is essentially powerless to help protect travellers. Opposition critic Randy Hillier asked, "What purpose and what value are we getting out of TICO? Clearly we have to review how TICO operates.”

McGuinty admitted the province should have done more to help people who were stranded when Conquest folded last week. He said, "I think we owe a little more to travellers but I'm not exactly sure what that is. I'm wondering if there's not more notice that we could have given to travellers dealing with Conquest that it was experiencing some real challenges."

The premier said the travel council knew Conquest was vulnerable but didn't know it was about to go under so quickly, and said he wants to review the agency "and make sure they have the necessary authority to intervene at the appropriate times."
TICO administers a $29-million Ontario travel industry fund that will reimburse travellers up to $5,000 if they're forced to pay their hotel because their tour operator did not pay the bill.

Other travel agencies and tour operators may be facing financial woes similar to Conquest Vacations. The problem is right now there are likely a number of businesses that are experiencing some real challenges, and if TICO were to blow the whistle on them, that's the equivalent of a death sentence.

There is a way to solve this problem. It is as follows;

First: The consumer must pay the travel agency or tour operator by credit card, money order, certified cheque, bank draft or cash. This way, the trip and vacation are immediately paid. There is no waiting for a cheque to clear.

Second: Within five days after the travel agency or tour operator has received the money and they have deducted their fees for themselves, the money should be forwarded to the airlines and hotel/resorts via a bank transfer. This way the airlines and resorts have their money at least a week before the travelers board the planes and arrive at the resorts. The money should not be held until the airlines and hotel/resorts are fully booked.

If a travel agency or tour operator hasn’t paid the money to the airline or hotel/report within five days after it received the money, their operations should be suspended and the government should take over and warn the consumers that their trips are suspended and that their money will be returned to them. This way, the consumers won’t be stranded in another country.

Fourth: If any travel agency or tour operator has two violations within a period of a year in which it hasn’t forwarded the money to the airline or hotel/resort within five days of having received the money from any of its customers, their licence should be immediately cancelled and the owners cannot reapply for another licence for a period of five years.

By doing it this way, the only need for TICO to come into the picture is if the airline or hotel/resort fails to provide the services paid for by the travel agencies and tour operators.

When you travel to any country and you have booked your hotel and flight in advance, be sure that you have enough money in your credit card to pay for your hotel/resort and flight home if your travel agency or tour operator goes bust. Your credit card will reimburse you. And equally important, don’t give your passport to your hotel after you have book in. The passport is yours and not theirs. Further, if you are taking your family with you and the costs exceeds $5,000, (the upper limit per person TICO will reimburse) then divide the payments amongst the family members so that TICO can repay each one back.

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