The Collapse of AVG Travels and the Call for Better Consumer Protections
Australian travellers who collectively lost millions of dollars after their travel agency collapsed are calling on the federal government to overhaul consumer protections in the travel sector. This call comes in the wake of the liquidation of Melbourne-based agency AVG Travels, which sold discounted international tour packages to Asia, Europe, and Africa.
The company was placed into liquidation in May, and new documents lodged with ASIC reveal that AVG Travels owes $4.3 million to nearly 800 creditors, including customers, employees, and suppliers, while holding just $83,000 in assets. Liquidator McGrathNicol has informed those affected that the company was unable to provide refunds.
This collapse has prompted a petition with more than 1,000 signatures calling for stronger safeguards for those who book through travel agencies. Among the signatories are AVG Travels customers urging the federal government to reinstate a national consumer protection scheme for travel bookings, known as the Travel Compensation Fund (TCF).
The TCF, once mandatory for licensed travel agents, would have compensated travellers for insolvency, but it was abolished in 2014 to cut red tape. The petition was launched by Arun Jhunjhunwala, whose extended family group of 45 people across 15 families lost their holiday to China in March next year, after AVG Travels collapsed. The group is $60,000 out of pocket.
“There was no prior warning, no communication about their deteriorating financial position and no offer of refunds or alternative arrangements,” Mr Jhunjhunwala said. He highlighted the lack of transparency and support from the company during this crisis.
The company’s membership with the sector’s peak body, the Australian Travel Industry Association (ATIA), was cancelled in August 2022 for failing to meet required “financial and ethical standards.” In a statement, ATIA said it was now up to government regulators to investigate and hold “accountable any individuals found to have operated a business below legally acceptable standards.”
Another Australian agency, Traveldream, also collapsed just over a year ago, leaving travellers stranded overseas and out of pocket. This incident has led to broader concerns about the regulation of the travel industry in Australia.
Systemic Failures in the Travel Industry
“This isn’t just about AVG — it’s a systemic failure in the way the travel industry is regulated in Australia,” Mr Jhunjhunwala said. “When these companies collapse, people are left as unsecured creditors with little to no chance of recovering their funds.”
AVG Travels owner and CEO Duc Tiem Dao, also known as David Dao, established the company in Vietnam in 2012, before opening offices in Melbourne in 2015, then Japan and the UK last year, according to the company’s website. Documents filed with the UK companies register show his company, AVG Travels UK Ltd, changed its name to Alder Journeys Ltd on May 26, the same day the Australian company was placed into liquidation. Its website, Alderjourneys.com, is online, with the site stating it is “launching soon.”
Mr Dao, a Vietnamese national, has now listed his Melbourne home for sale for $3.5 million. The ABC has contacted Mr Dao for comment.
A former employee, who asked not to be named, described the weeks leading into the collapse as “chaotic.” They said the small crew of Melbourne staff would sell travel and answer customer inquiries, while airline ticketing was handled by a single staffer in Vietnam. “To have one person issuing close to 3,000 airline tickets in May was just insane.”
The China Nightmare
Perth retiree Paul Beard had dreamed of visiting China for years. When he saw AVG Travels advertising what appeared to be a bargain 11-day Terracotta Warriors tour, he thought he had found his chance. After researching the company and reading “glowing reviews” from previous travellers, Mr Beard paid $3,569.
He said customers were told flight tickets would not arrive until four weeks before departure, so he was not concerned when he initially heard nothing. But when that deadline passed, he began contacting the company. “From that moment on, I was basically given the run-around every day for weeks,” he said. “Then, of course, it all went crash.”
Mr Beard said the experience had left him frustrated, but he was also conscious that many customers had lost far more than he had. “I’m not wealthy by any means and $3,500 is a lot to lose,” he said. “But some people have lost an absolute fortune.”
The Australian Travel Industry Association said consumers should ensure their travel agents were accredited with the peak body. The ABC has contacted Assistant Minister for Productivity, Competition, Charities and Treasury Andrew Leigh.
