The End of See & Sea

When a venerable travel agency seeks protection under chapter seven of the bankruptcy code, the shock waves rumble worldwide. That's exactly what happened when Carl Roessler decided to dissolve See & See Travel after a failed last-minute effort to bail his agency out of financial doldrums.

His decision came Saturday, April 26, Roessler told me. For the next five days his staff shipped airline tickets to clients, forwarded money to boats, and did what they could to see that their customers would get the trips they had signed up for. He closed his doors Wednesday, April 30, and handed over his keys to the bankruptcy referee on May 15.

Who Pays?

As I write this story on May 17, it's too soon to know the entire fallout, but certainly not every traveler will come out whole. Typically, See & Sea required a trip down payment equivalent to its commission, which it used for operating expenses. Later, when the client made another payment, it would get passed on to the boat. When See & Sea closed, it kept clients' down payments and instructed clients who had yet to pay the full amount to contact their boats directly.

Roessler believed that all boats should be willing to take the remainder of the client's payment and run the trip because the amount was equivalent to what the boat would get anyway. True enough, but it required good faith on the boat owners' part, since they were under no legal obligation to do what Roessler hoped for. Furthermore, some clients have complained that they didn't get the booking service they paid for with their commission.

Still, as far as we can tell, most people will get their planned trip -- though some will pay more. One Undercurrent subscriber has found that Greg Lawlor, who runs the Sere-ni-Wai in Fiji (now with Aggressor Fleet), is uncertain that he will accept the amount See & Sea would have provided for a charter. Another reader finds the Thorfinn unwilling to accept the price, less the discount paid See & Sea. Further, he says he'll have to pay the Truk Continental a second time (he prepaid See & Sea), but he had no problem with Ocean Hunter and Manta Ray Resort.

Readers Myron and Mercedes Johnson had prepaid a trip on an Aggressor. Three days after See & Sea closed, the boat had not been paid, nor had the Johnsons received their Air Fiji tickets. They were justifiably concerned, but a week later the tickets arrived and the Aggressor notified them that See & Sea had paid.

Roessler, who turned over the keys to the bankruptcy referee on May 15, said there is still money in the corporation, so creditors ranging from Paul Humann to Skin Diver magazine will be in line at the bankruptcy court to get cents on the dollar. Roessler said that he himself is the largest creditor.

Outcompeted by Technology

So what happened? For 30 years, San Francisco-based See & Sea Travel specialized in high-end dive travel, focusing on live-aboard boats. Roessler carved his niche by insisting on exclusive wholesale booking rights, taking as commission up to one-third of the price. In return, he spent a whopping amount -- up to a quarter of a million dollars annually -- to advertise the vessels in magazines, visit trade shows, and print high-priced brochures. To support that marketing and booking role, boats referred potential customers to See & Sea.

Because his boats were scattered around the world, far from the American market, and owned by separate individuals, Roessler's design held for years. Without faxes, satellite phone service, and e-mail, boat owners were beholden to See & Sea.

The first threat to exclusivity came as the Aggressor Fleet expanded and became its own booking agent. Nonetheless, See & Sea remained strong -- until the Gulf War brought a general reluctance to travel. The resulting flood of cancellations affected him financially, and debt mounted as he continued to advertise.

Then came the technological spurts of the last five years, and the order-taking role of travel agencies and wholesalers began to evaporate. Though Roessler remained highly respected for his honest advice and See & Sea operated as a solid professional operation (though deteriorating, some thought), that wasn't enough.

In December, Fiji's Nai'a, one of See & Sea's premier boats, told Roessler they could no longer grant him exclusive booking rights. According to Nai'a partner Alexis Edwards, See & Sea was unable to keep their boat full, so they offered Roessler eight exclusive trips, allowing others to be booked directly or through other agencies. Soon, the Undersea Hunter (Cocos Island) and the Ocean Hunter (Palau), which are owned by Yosy Naa'man and Avi Klapfer, edged away from exclusivity. With these three boats representing 40 percent of See & Sea's business, the squeeze was on.

An Attempt to Survive

While See & Sea was a slightly profitable business, it carried a great deal of debt. To survive, Roessler created a plan to merge See & Sea and the three boats into a single corporation, with all the principals having a share. Roessler told me that after he had fashioned the plan, he was "high as a kite" with hope that it would work for everyone. On April 26th the principals would meet to discuss it.

Alexis Edwards and her partners spent five days before the meeting trying to figure out how to make it work for them. They had two boatloads of people traveling with them in May for which See & Sea owed them $61,900 (as well as bookings either partially or fully paid to See & Sea well into 1998). The only hope they had of getting their money, she told me by phone from Fiji, was to bring the parties together.

"I really like Carl," she said, "and we did everything we could to save the business and save our money." But See & Sea debt from 1994 and earlier -- in the upper six figures -- was just too great to assume. By rejecting the deal, they left their $61,900 on the table.

In retrospect, says Edwards's partner Colby Jones, "Had I known at that moment the depth of Carl's financial problems, we could have saved the $300 for the conference call [between Klapfer in Israel, Naa'man in Costa Rica, and Edwards in Fiji, May 13], the $15,000 for the exploration, and several weeks out of our lives."

Roessler told me that "in this business we don't make money like Silicon Valley. I thought the divers in the room wanted to make it happen, but harder heads prevailed," he said. The deal didn't happen and "it blew me away." Under the circumstances, Roessler told me, "it was as clear as it could be" that he had to shut down. Edwards confirmed that in their meeting Roessler concluded he would go out of business.

They ended the meeting by sending a letter, signed by Roessler, Naa'man, and Edwards, to all See & Sea customers who held bookings, asking them to send the balance on their account directly to the boats. They agreed to accept all bookings. As Edwards told me, "We only have our reputation to go on. In a few years, people won't remember that See & Sea went out of business, but they will remember whether we took them."

See & Sea began getting calls Monday. While some people got through, most heard the message of See & Sea's closure on the answering machine.

Requiem for an Agency

Roessler called the end of See & Sea "a shattered dream and a damn shame." His relationship with clients was "based on absolute trust. They sent us big checks and we delivered. I tried to protect everyone's vacation, and if they take the information we gave them and the boats run the trips as promised, everyone will get their vacation."

As far as bankruptcies go, there are few winners, but most of See & Sea's clients were fortunate. For some people, their vacation will cost them more time and money than it should, yet most, it seems, will be satisfied. Some people who paid by credit card have contacted their credit card companies trying to get their money back. Furthermore, See & Sea was registered under the California seller-of-travel laws, so California residents may file refund claims with the Travel Consumer Restitution Corporation (415-924-1881).

As for Roessler, he hopes to offer private travel consultancy to old clients and new ones. He has already talked to many boats about fee arrangements. He personally owns his Web site and will use that as his marketing link to the world.

Ben Davison