TORONTO — The August 2018 failure of Sinorama Holidays Inc. has dealt a blow to the Ontario travel industry’s Compensation Fund, however the impact is nowhere near as bad as it could have been.
Yesterday TICO’s Board of Directors approved a payment from the Compensation Fund in the amount of $249,490 to assist 135 consumers who did not receive travel services for which they had paid.
The approved payment follows a legislated six-month filing deadline for all claims to the Fund. Consumers affected by Sinorama’s failure had until Feb. 11, 2019 to submit claims.
All eligible claims have been paid out, says TICO. TICO believes all affected consumers had their losses mitigated through payments from the Fund and through credit card chargebacks.
The $249,490 is on top of the $68,083.82 paid out from the Fund at the time of Sinorama’s failure, when TICO assisted 136 consumers with immediate departure and trip completion (repatriation) provisions. This included a payment of $12,541.66 for trip completion to assist six consumers already in destination at the time of the failure, and a payment of $55,542.16 to assist 130 consumers who had immediate departures to various destinations.
Last summer Sinorama Holidays closed its doors with a voluntary termination of its Ontario Travel Industry Act, 2002 registration on Aug. 8, 2018.
In the immediate wake of the closure TICO estimated that Sinorama claims on the Fund could exceed the legislated maximum of $5 million.
“It’s unfortunate when a registered travel retailer or wholesaler ceases operations, but TICO is here to support consumers affected by the failure and to protect their travel investment,” said TICO President & CEO Richard Smart.
“While these situations are rare, they are a timely reminder that consumer protection and reimbursements through the Travel Industry Compensation Fund are only available to consumers who book with a TICO-registered travel agency or website.”
Over its 13-year history Sinorama Group expanded from Canada into Europe, Australia/New Zealand and the U.S., began trading as a public company in the U.S. and reportedly sold $123 million worth of travel in 2017, up 27% over the previous year.
By April 2018 the company was allegedly running a $10.9 million shortfall and scrambling to bring in new money to cover the deficit.
The OPC in Quebec first notified Sinorama that its license would not be renewed in that province, citing insufficient funds. Soon alarm bells were going off at Consumer Protection B.C. and TICO too.
Travelweek’s sister publication, Quebec-based Profession Voyages, says Sinorama “had designed a business model of its own” and was reviled among its competitors for its aggressively low pricing.