Skift Take

It's a matter of probability that some companies will face cash crunches. It appears HotelQuickly has. But global travel search companies need to detect problems sooner. They must quickly put a pause on referring consumers to troubled companies before too many victims pile up.

Paul Katsen of New York was set to begin a Wednesday trip to South Africa when he received a message from HotelQuickly saying his hotel bookings were canceled. The online travel agency gave him a voucher for a future HotelQuickly purchase. When Katsen contacted the hotel, it said an agency had canceled his reservation on December 5.

Katsen wasn’t alone. Social media and consumer forums lit up in recent days with hundreds of complaints as HotelQuickly left hundreds of travelers stranded

Rakeesha Chetty of South Africa was a week away from her trip to Zambia with friends and family when she received a notice from HotelQuickly that her booking had been canceled. Again, she received a voucher for future travel. But she questioned the value of the voucher.

As of Saturday and Sunday, Skift’s random test searches on HotelQuickly were not turning up any availability for properties in various cities, suggesting the site had suspended operations.

Company officials failed to answer reporters late last week at The Straits Times in Singapore, where HotelQuickly’s parent company is registered.

Update: The Travel Industry Council of Hong Kong says that HotelQuickly’s travel agent license expired on November 12, 2018, according to an email forwarded by a customer to Skift. That news makes this potentially a criminal matter, as it may be illegal to sell travel and fail to deliver the reservations without proper licensing.

The parent company of HotelQuickly, Rising Sun Merchant Services, was slow to respond.

But on Monday December 10 CEO Jérôme Clé, who has doubled as executive chairman of HotelQuickly since he finalized the transition of the startup mid-last year, provided a statement:

“I have reached out to HQ management, and I was informed that due to an unforeseen issue with their main provider which has affected many reservations, many bookings have been canceled,” Clé said.

“This had nothing to do with the financial situation of the company,” Clé said. “But while multiplying the revenue by 5 times this year, compared to last year. The company did suffer huge losses since the beginning of this year with one of their main supplier, and it took them 8 months to get to the table and negotiate the losses and the damages.”

“HQ spent an enormous amount of money and energy to build its brand but couldn’t work anymore with this supplier until all issues were dealt with,” Clé said. “Abruptly the supplier did put pressure on HQ to terminate the relationship while HQ was negotiating the damages with them hence HQ had no other choices to sadly cancel a lots of their customer’s booking until it could fix this.”

“HQ had offered to each client a voucher for the same amount booked originally and is doing everything to return to normal as soon as possible,” Clé said. “HQ is already renegotiating new agreements which will bring stability and better services to its clients and is deeply sorry for any inconvenience caused.”

Snowballing Complaints

In the past week, complaints about HotelQuickly snowballed on user-generated review platform Trustpilot and TripAdvisor’s budget travel forum.

Questions for the Travel Search Giants

HotelQuickly was the second online travel player to collapse in the past six months. This summer, Greek online travel agency Tripsta, which also operated as Air Tickets, faced a liquidity problem that forced it to suspend its business indefinitely.

In both cases, many travelers had been referred to the small, little-marketed brands by doing searches on major price-comparison search engines, such as TripAdvisor and Trivago, according to their online complaints.

The consumer stories raise questions about how rapidly those global tech companies respond to problems at advertising partners.

In HotelQuickly’s case, the response seems to have been too slow. Over the weekend, consumers added new complaints about HotelQuickly to Trustpilot every half hour, on average. In recent days, someone even found the time to set up a website trying to spark class action litigation. But as long ago as January, complaints had been piling up in forums like TripAdvisor.

More backchannel communication among companies might have helped. Other companies that did business with HotelQuickly appeared to have discovered a problem recently.

Rather than book directly with hotels, HotelQuickly often sourced rooms from booking agents, such as third-party wholesalers. Several emails angry travelers forwarded to us for review suggest that third-party companies suspended HotelQuickly for non-payment, though we were unable to reach those companies for confirmation by the publication deadline.

Hotel Tonight Clones Struggle

HotelQuickly, founded in 2012 and based in Bangkok, had raised $10 million, with German startup incubator and now public company Rocket Internet as one of its major backers. But it apparently faced difficulties in sustaining itself.

In early 2016, the company had slimmed down to try to become profitable, and it also rebranded. But profits proved elusive.

In August 2017, the backers finalized a sale of HotelQuickly to Rising Sun Merchant Services, and the founders departed. Terms of the deal weren’t disclosed.

HotelQuickly’s content blog promoting travel stopped producing new posts at the end of November.

A side note: Years ago, one of the critiques against last-minute mobile booking pioneer Hotel Tonight was that its model would be too easy for companies like Rocket Internet to build copycats of. In hindsight, competitors large and small to Hotel Tonight, which continues to thrive, had misguided priorities and many have either flat-lined or crashed.

UPDATE: This story was updated Monday to include a statement from HotelQuickly’s executive chairman, who had not been reachable by publication time, and again with information about the company’s expired license in Hong Kong.

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Tags: bankruptcies, hotelquickly, metasearch

Photo credit: The staff of HotelQuickly before management changes in 2017 and the recent financial difficulties. Online travel agency HotelQuickly faced financial trouble that prevented it from fulfilling its hotel bookings, stranding many travelers worldwide. HotelQuickly

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