Hundreds hit by collapse of online travel firm

HUNDREDS OF Irish people have had their travel plans thrown into disarray following the collapse of the 1800hotels.ie. online travel company.

The company, which handles bookings for some 70,000 hotels around the world, said last night that it had been forced into bankruptcy proceedings in the United States as it attempted to restructure its debt.

In a statement, a spokesman for the company said some customers might experience room cancellations. “All customers should contact their hotel directly to make sure that their reservation is not affected,” it said.

The 1800Hotels spokesman said it was pursuing a legal injunction to prevent any further disruption to customers. “We will work diligently to resolve this matter as soon as possible and will provide more information as it becomes available.”

1800Hotels was set up in Dublin in 2003 by Irish businessman Graham Peakin, but is now based primarily in Tampa, Florida.

The 12 staff at its Dublin call centre in Clontarf were informed yesterday that the agency was to be liquidated following several months of mounting losses, according to a senior source at the company.

A last-minute deal to find a buyer for the company fell through on Monday night, the source said.

It is understood the company suffered a significant loss of earnings from the disruption to travel in April caused by Iceland’s volcanic ash cloud. The company was understood to be taking up to 150 bookings a day from Irish customers in recent weeks.

Two of the company’s suppliers of hotel accommodation, known in the trade as bed banks – companies that purchase bed nights from hotels and sell them on to sites like 1800Hotels – are understood to have cancelled the agency’s bookings after it ran into financial difficulties.

The company had earlier said that it had made an application before the US court to ensure that suppliers would honour its bookings and that it was taking an injunction against two of its largest vendors to prevent them from cancelling bookings in the next two weeks.

There have been numerous complaints from customers in the US and Europe that their bookings with 1800 Hotels were not recognized when customers arrived at hotel receptions

A number of callers to RTÉ's Livelineyesterday spoke of turning up at hotels in recent days only to be informed their bookings had been cancelled because 1800Hotels had not paid third-party companies, even though the customers had paid 1800Hotels in full for their stay.

Simon Nugent of the Irish Travel Agents Association said the likely upshot of the company’s closure “is that a lot of people’s bookings are going to be cancelled and they’ll have to pay more to rebook them, especially as they get closer to the departure date”.

He said some consumers may be reimbursed for cancelled bookings via their credit card companies.