1. HotelQuickly

• HotelQuickly was a startup founded in 2012, that offered customers discounted hotel booking rates and last-minute bookings.
• The company evolved fast, had a team of over 100 employees, aiming to bring mobile-first, last-minute hotel bookings. The app was downloaded more than 3 million times and the company had exclusive partnerships with more than 5,000 hotels and listed more than 200,000 properties through resale agreements.
• In 2016, the company acquired Tonight Japan by an undisclosed amount, hoping to tap into the Japanese market.

1.1. Why the company failed

• By 2017, the company was already about to hit $100 million in annualized transactions, however, challenges were pilling up. According to Tomas Laboutka, the co-founder, the price of customer acquisition was beyond a sustainable level.
• He stated that “a growth-at-any-cost mindset could be attributed partly to the increasingly pronounced oligopoly of the two global travel players. But, the landscape also changed with the ever-rising dominance of Facebook and Google and the evaporating impact cheaper ad networks could offer.”
• Other issues the company faced was lack of penetration of mobile payment services at the time and the difficulties surrounding the multi-country strategy. To handle all those challenges, the founders searched for a buyer who could provide the capital to leverage the company. They found Rising Sun Merchant Services, who bought the company and the founders departed.
• According to Laboutka, “On August 2017, we decided to sell with a shared vision and promise of synergies across other travel portfolio companies as well as of additional technological expertise.” But the partnership didn’t go as planned.
• In 2018, Rising Sun Merchant allowed HotelQuickly to run a debt of approximately $12 million with Hotelbeds, a wholesale supplier of many of its rooms. By November 2018, Hotelbeds began to cancel the company’s bookings and other suppliers followed suit.
• A Hotelbeds spokesperson stated that “We help our travel buying partners source hotels through our technology platform and HotelQuickly was working with many similar providers. As is standard across the industry, the travel agent or OTA [online travel agency] acquiring the booking is always responsible for all aspects of the reservation, not the least responsibility for settling the hotel bill. Sadly, if they fail to do this, cancellations will follow and this is what many other wholesalers were forced to do in this case.”

1.2. Breaking point

• On December 2018, customers began to receive emails canceling their reservations, with the company claiming problems with a supplier but not offering further explanations. The clients were also denied refunds and only received irredeemable vouchers as compensation.
•  Trivago and TripAdvisor removed the company from their websites and advised customers to dispute the payments. The site is no longer available.

2. Malvern Group

• The parent company of both Super Break and LateRoom went into administration in August 2019 due to solvency issues.

2.1. Why the company failed

• Malvern group faced solvency issues after Cox & Kings Ltd (India), an Indian tour operator, who owned 49% of the company, defaulted on a loan in July 2019, leading to a downgrade by credit agencies. The company tried and failed to secure funding or a buyer for the stake owned by Cox and Kings, who've fallen behind on $100 million in debt payments.
• Cox & Kings India stated that "working capital situation at Cox & Kings stretched in the last few months and was further impacted due to its inability to replace the short-term loans with long-term loans and regular working capital line”.
• The fast collapse of Malvern and the fact that it placed itself up to the market after the company defaulted on its IATA billing and settlement plan (BSP) in June indicated a lack of cash flow option in the business and left many wondering what caused the failure to happen so quickly.
• Fillings from November 2018 showed Malvern reporting a pre-tax loss of £2.3 million and said that it was embarking on a “strategic change program to position itself as the UK’s leading B2B travel technology provider”.
• The company also acknowledged that Super Break and LateRooms had suffered from a difficult trading environment that was aggravated by the “increased cost of acquiring website traffic and the 2017 terrorist attacks in London.”
• The Global Data’s head of research for travel and tourism, Nick Wyatt, stated that smaller players such as Super Break and LateRooms are struggling to compete with the marketing budgets of online travel agencies such as Expedia and Booking.

2.2 Breaking Point

• According to the Financial Times, a source familiar with the sale process said that although there had been “a healthy interest” in the businesses, the timescale in which a deal needed to be finalized was too tight to prevent collapse.
•  KPMG has been appointed an administrator to the companies after the collapse in August 2019. “The management team recently appointed advisors from KPMG to undertake an accelerated sales process to ensure further investment and have engaged with our principal bankers to secure interim funding.

2.3. Super Break

• Established in 1983, Super Break was specialized in short city breaks in the UK and overseas and employed about 250 people. The company was part of the Malvern Group.
• When Malvern went into administration, Super Break stopped trading in August 2019. Since Super Break was an Abta travel agency, refunds were guaranteed for most of its customers.
• After the collapse, Super Break founder, Gordon Miller, expressed his wishes to relaunch a “stripped-down” version of the company that would sell fully bounded hotel-only bookings. He said “I’m interested in a stripped-down version of Super Break — so nothing overseas. Because we can’t compete and the margins aren’t high enough. This would be back to basics. A controlled operation, well-financed, UK-only, and sold through the trade.”
• He later withdrew from the bidding process, citing that “We just couldn’t get comfortable in making a bid on the basis of what we have been told. We had a real wish to turn the business around and make it what it should be".

2.4. LateRoom

• Born in Manchester in 1999, LateRoom was an online accommodation site specialized in late stays for leisure and business.
• LateRooms, also a part of the Malvern Group (after being previously owned by TUI and Cox & Kings), was not an Abta listed agency. That is, it could not receive payment from customers for their bookings, acting only as an agent.

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