Dream holidays can swiftly turn into nightmares. That is the current feeling amongst customers of well-known coach and travel agency Five Stars Tours which abruptly closed all eight of its branches across Singapore recently.
“It is so sudden,” said a spokesman for SA Tours, which also has an office at People’s Park Complex. “They were still doing tours to Europe last month and suddenly the lights of their office were switched off.” Straits Times, Jan 9, 2014
The news could not have come at a worse time for potentially hundreds, if not thousands of travelers who were looking forward to returning to their homeland during Chinese New Year, and who have now been left in the lurch.
When reporter Sia Ling Xin for Yahoo Newsroom visited Five Stars’ main branch at People’s Park Complex on Thursday 9th January, a notice on the shuttered doors read that the agency “has closed for business and stop providing services with immediate effect. We will be returning all passports to customers through registered article in the next few days”.
It also said customers with unfulfilled trips can make claims through travel insurance or file claims through the Small Claims Tribunal or the Consumers Association of Singapore (CASE). As of Friday 10th January, CASE has recorded 437 complaints, 50% from Five Stars customers who had bought bus tickets to Malaysia.
According to one concerned customer, housewife Ms Chua, the popular travel agency that employed more than 200 staff gave no advance notice or warning before shutting down.
Ms Chua, a loyal customer, had just paid Five Stars Tours over $2,000 for a trip to Beijing.
She recalled: “I wanted to pay by credit card, but the staff told me they only accepted cash as it was a special promotional package.”
When Travel Companies Goes Bust
Singaporeans shocked by this latest news may remember when one of Singapore’s largest tour operator Ken-Air tours went into liquidation.
Industry insiders say that Travel Operators often hit trouble when they diversify and their over-ambitious expansion plans backfire.
“Many companies do very well in their own business but sometimes they can diversify into other areas with higher risks. “ Yeoh Siew Hoon, Travel Weekly Asia, February 2002
How Can Travel Insurance Help?
Travellers do not just incur financial risks when Tour Operators fail. All travel entails risk. And while travel insurance can help you and your family with the consequences of travel agency bankruptcy, it can also protect you from the fallout from accidents, illness, lost baggage, missed flights, cancelled tours, theft and other such related incidents.
DirectAsia.com’s advice to people who have bought travel insurance with us and have booked with Five Stars is that they will be able to claim if they satisfy policy conditions including:
- Have bought travel insurance at least 7 days before the scheduled trip.
- Have bought travel insurance before Five Stars news was reported in mass media.
Please refer to your policy details for full Terms & Conditions.
In the meantime, Five Stars Tours will have its travel agent licence revoked by the end of January, unless it can provide the Singapore Tourism Board (STB) with valid reasons this action should not be taken.