Divers Left Floating As Agencies Go Bankrupt

As we pointed out in our last issue, the dive travel industry is in for tough times in the wake of the September 11 terrorist attacks. Just before Thanksgiving, three large dive travel wholesalers suddenly (and silently) closed their doors: Tropical Adventures, Dive Tours, and Adventure Express, all operating under the umbrella of Leisure Travel Development, Ltd. They informed their customers only by leaving a message on their answering machines blaming the economy and 9/11.

Traveling divers got stiffed. Many who paid deposits or even the full amount for their trip to these firms, have learned that their payments were never forwarded to the resorts, carriers, or live-aboards for which they were intended. No wonder they’re crying, “Show me the money!”

Take the case of Undercurrent subscriber Ron Bricker of Washington, D.C., a long-time customer of Seattle-based Tropical Adventures. He sent a check for $3,500 to Tropical Adventures just days before it closed. That was the final payment for bookings on the Palau Aggressor and two land-based Palau resorts. Tropical Adventures cashed the check, but didn’t pay the Aggressor. Bricker only heard of TA’s demise because someone at the Aggressor fleet called to inform him of the problems with TA. When he phoned Tropical Adventures, a recording directed him to

PADI Travel Network. (We called the home number of TA’s principal, Brian Yesland, but his answering machine was too full to take a message. Our e-mails have gone unanswered, as well. No one from any of the agencies will speak with customers . ) PADI Travel Network is try i n g to handle many bookings made with Tropical Adventures and Adventure Express. They’ve stated that, “We want to assure the diving community that we’re here to help and will handle travel arrangements to the best of our ability.” However, PADI ’s Christine Grange told us it was too soon to tell if there was any money available for reimbursem ents .

Caradonna Caribbean Tours , a Florida wholesaler, has taken over files for Dive Tours, and some Caribbean bookings for Tropical Adventures and Adventure Express. Marketing Director Anne Louise Tuke told us they were giving priority to the most imminent departures. But she also warned, “Each case is different, and we may not be able to resolve all the cases. We can’t make any guarantees, and we can’t absorb any losses.” Obviously, some people are flat out of luck.

PADI and Caradonna may be able to negotiate some help from the destinations involved in these bookings. For example, Wayne Hasson, who runs the Aggressor Fleet, tells us that his company is prepared to “help consumers get their money back, to get restitution, or to get on any of our boats without going further out of pocket.” The Aggressor fleet will honor the reservations of customers who can prove they’ve paid money to the defunct wholesalers. “And then,” adds Hasson, “we’ll help them get what’s coming to them. If there’s money out there, we’ll find it.”

Of course, the operative word here is “if.” Expect no miracles. In fact, Tropical Adventures shopped around its customer files to other travel wholesalers before PADI and Caradonna agreed to take them on. One industry pro who looked at the numbers decided the best she could do was break even by taking on this agonizing case load. So she passed. You can’t get blood from a stone, much less the headstone of a dead wholesaler.

Ron Bricker and other divers in the same boat (or, more correctly, out of the same boat) are scrambling to find recourse. Bricker first looked to his trip insurance, but he was shocked to learn that the rules of the game had changed just before he bought his policy. Stuart Schakett of Meridian Travel Services in Reynoldsburg, Ohio, reports, “Several travel insurance companies have dropped supplier default coverage. Others have added a stipulation that insurance must be purchased within so many days of trip deposit to qualify for default coverage, and coverage will not kick in until so many days after the policy is purchased.” For instance, Schakett points out, “Travel Guard has kept its default protection in place if the policy is purchased within seven days of trip deposit; and default protection is not in force for the first 14 days.”

Others, like Access America, will cover supplier default only for selected operators or carriers — a list that’s sure to shrink as the travel industry continues to atrophy.

Divers can’t rely on the wording in old insurance policies, brochures or websites. Before taking out insurance, call the company and get clear, unequivocal answers to your questions about what is and isn’t covered. And then get a hard-copy backup by fax or e-mail before you send in your premium. As Schakett advises, “Think of travel products as being like dive gear. You should get information on several options and pick the one that closest fits your needs.”

Bricker is pursuing legal remedies as well, but that’s a long, complex and expensive process. And even if he gets a judgment, i t ’s another thing to collect from business with no assets — and defunct travel agents have few assets if the owners have run with the cash. You see, typically agencies that get into trouble reflect bad cash management. Suppose, for example, you’ve paid $1,000 down for a trip six months from now on the Jolly Roger. Instead of f o rwarding your deposit to the Jolly Roger, the agency uses it to make the final payment for a group that’s boarding just as you pay (or perhaps, even to meet current agency payroll). If business drops, as it did after 9/11, there aren’t enough new customers coming in the door and enough money doesn’t come in to cover your deposit. The agency doesn’t tell you, takes your final payment 30 days from your departure date, but sends it to the Jolly Roger to cover the group that’s boarding that weekend. Your money is gone. And without new customers coming in the door, the agency is dead. It’s really a pyramid scheme.

So how can other divers avoid predicaments like Bricker’s? Sadly, you’ll need to increase your due diligence when planning any trip, doing your best to learn about the stability and reliability of your travel agent, the agent’s wholesaler (if any), each carrier on their itinerary, and their chosen dive resorts or live-aboards. That’s quite a task, but any one of them could go south and foul up your plans. Look for signs of nonresponsiveness, deteriorating service, or organizational problems. Avoid any firm that’s been “de-listed” for default coverage by the major travel insurers.

While the key advice here is to do business with people you know and trust, unfortunately that’s what many divers were doing when they were working with Tropical Adventures.

Nonetheless, a solid travel agent often goes the extra mile to take care of good clients.

Reconsider whether to do business with a travel agent, resort or boat that will not take credit cards. Most credit cards offer purchase protection. Check the fine print of your agreement; if your current card doesn’t offer protection against nondelivery of s e rvice due to default, that may be reason enough to switch to one that does. Most travel insurance policies require that you pursue a credit card refund first, and then will pay only what your card issuer doesn’t cover.

And don’t prepay any sooner than you have to, but keep track of deadlines so you don’t incur any late charges or jeopardize your reservations .

Don ’t let all this scary news prevent you from going. These aren’t the first shocking failures in the field; in past years we’ve run obituaries for one-time industry leaders like Sea Safaris and Carl Roessler’s See & Sea Travel . Tough times like these shake out the weak links, and the strong survive. Meanwhile, there are tons of bargains out there now. Just shop a little more carefully.

P.S.: Sign up for the free Undercurre n t e-mail for print subscribers only on our Undercurrent website. We will keep you informed of problems as they arise.