What Happens When A Supplier Goes Bust

Toronto-based G Adventures, known for group tours, safaris, expedition trips and small-ship ocean and river sailings, is expanding its cruise offerings with the recent purchase of iconic British cruise line Swan Hellenic.

The Canadian company bought the Swan Hellenic brand after its U.K.-based parent company, All Leisure Holidays Group, collapsed in early January. All Leisure also owned the Voyages of Discovery cruise brand, but that was not included in the sale. Neither was Swan’s ship, the 352-guest Minerva.

“For over 60 years, Swan Hellenic has been a pioneering leader offering cultural cruises to captivating destinations. We plan to restart the operation of Swan Hellenic in 2018 with a new ship and new voyages that will continue the brand’s extraordinary legacy. Itineraries will be announced this summer,” a G Adventures statement said.

G Adventures had earlier acquired two of All Leisure’s tour companies, Travelsphere and Just You.

Founded in the 1950s by a U.K. travel agency called Swan’s Tours, Swan Hellenic was known for its cruise itineraries to Greece and Turkey, and later to North Africa, and for the noted scholars, archaeologists and classical historians who served as its onboard guest lecturers. In the early 1980s the agency sold the brand to P&O Cruises, a Carnival Corp line. In 2007, Carnival decided to eliminate the Swan brand and sold it to Lord Jeffrey Sterling, a former chairman of P&O, who soon after sold it to All Leisure.

Thousands of Swan Hellenic and Voyages of Discovery customers were caught by surprise when All Leisure stopped trading just after the new year and announced that future cruises for both lines were canceled.

So what’s an agent to do?
Full refunds for booked cruises are expected to be made through the U.K.’s Civil Aviation Authority (CAA), a government entity that protects funds used to buy trips with an air component, and the Association of British Travel Agents (ABTA), which has a consumer-protection plan for member suppliers. All Leisure held the CAA’s Air Travel Organizer’s License, or ATOL, and according to a statement on the CAA web site, “If a travel company with an ATOL ceases trading, the ATOL scheme protects customers who had booked holidays with the firm.”

That appears to be good news for U.S. agents who had clients booked on future Swan Hellenic or Voyages of Discovery trips. But, as a general rule, it points to the possibility that agents and clients can be left holding the bag if consumer protection plans are absent.

Travel insurance policies and supplier organization plans, such as the U.S. Tour Operators Association’s $1 Million Travelers Assistance Program, can save the day in the event that a provider shuts down.

USTOA CEO Terry Dale said that his group’s program is “the strongest of its kind in the industry.”

“Perhaps most importantly, it provides travel agents with peace of mind knowing their clients’ vacation investments are protected with a solid financial safety net. The program requires each tour operator member company to set aside $1 million of its own funds to protect consumers’ deposits and payments against losses arising specifically from bankruptcy, insolvency or cessation of business of that member company,” Dale said.

Along with tour operators, USTOA has cruise firm members, such as Holland America, Princess, Grand Circle Cruise Line and Lindblad Expeditions, as well as tour companies with cruise offerings, like Tauck and Abercrombie & Kent, and the Globus family of brands, which operates Avalon Waterways.

Neither Swan nor Voyages of Discovery were active members of U.S. Tour Operators Association, Dale said. But both lines were members of CLIA. A CLIA spokesperson referred agents and clients with All Leisure bookings to either the CAA or the ABTA. Visitors to these sites can follow prompts to the appropriate claim forms.

At ASTA, meanwhile, a spokesperson said it doesn’t appear that either Swan Hellenic or Voyages of Discovery were society members. She said that when ASTA learns of a supplier failing, it may send a Member Notice. She cited Tom Harper River Journeys, which appeared to have closed down in spring 2015, as a sample case that prompted a notice to retailers.

“Our goal is to provide as much early-on information like this to members as possible, when and where known,” though that “may not always be possible. Subsequent assistance to agency members impacted is then handled on a case-by-case basis depending on the issue, keeping in mind ASTA does not have legal authority or oversight in these types of situations. The agency has the primary responsibility to assist affected travelers with refunds, rebooking and the like,” she said.

In Swan Hellenic’s case, it seems as though world events had a hand in its parent company’s failure.

All Leisure chairman Roger Allard recently told the London Mirror: “Since the Arab Spring the world has become a smaller place and it was no longer possible for us to take our small ships” to many destinations. “Egypt, Libya and North Africa, Lebanon, Syria, the Black Sea have all become difficult, and even Istanbul and Turkey have now been removed from the map. Then we had Brexit and the weaker pound, when all our costs are in dollars, euros and other local currencies. It was impossible to keep going,” he said.

All Leisure was based in Market Harborough, England.