Simon Isaacs
Just four weeks after collapsing with debts of at least $4.4 million, the Check-in.com.au business has been resurrected with former MD Simon Isaacs acting as a consultant to the new owners, Allied Consolidated, which bought the failed company’s assets for $35,000 last Friday.
Check-in began taking bookings again today and – by pulling inventory from online wholesalers – is even selling properties that don’t want involvement because they are owed money by the previous owner, Accommodation Clearing House.
Meanwhile, company liquidator Manfred Holzman attacked the merchant model payment system. “The whole way this works is wrong and the whole industry needs to be looked at,” he said.
One supplier said: “We terminated our relationship with them a few months ago because we weren’t getting paid. Now our product is on their site. We think they (the new owners) may have set up a relationship with another wholesaler.
“We’ve emailed and asked where they’re getting rates from and get clarity on how it’s working. If we don’t we’re going to have to work on a process of elimination. This is a real problem for the industry in that your product can turn up anywhere.”
Adir Shiffman from Allied Consolidated confirmed that it has employed Mr Isaacs, who founded the now defunct Accommodation Clearing House, on a retainer to assist with the transition.
He said Allied has retained four or five key employees and is now communicating with the industry to let them know of the site changes.
“The conversations we’ve had with hotels to date have generally been positive. If a hotel doesn’t want to be there they should contact us and we will take them off.”
Mr Shiffman, who declined to name the wholesalers now supplying Check-in with inventory, said Allied consolidated is a newly re-listed company looking for opportunities in the internet space.
It has strong balance sheet, he said, with “north of $1 million cash in the bank”.
For $35,000 it gets Check-in.com.au’s e-commerce platform, 350,000 customer database, supplier lists, domain names, logos, business names and other intellectual property.
Allied Consolidated has not taken on any liabilities or obligations of the previous operating entity, Accommodation Clearing House, which was placed in voluntary liquidation on May 21.
Meanwhile, company liquidator Manfred Holzman attacked the merchant model payment system – where online travel agents take the client’s money before reimbursing the hotel minus their booking fee post-stay – which allowed Check-in to spend client money without legal oversight or constraint.
“The whole way this works is wrong and the whole industry needs to be looked at,” Mr Holzman said. “The issue I see is that these people set up their booking engines and don’t have to maintain a trust account.
“They are receiving huge amounts of money from people and they can hold 100% of that for months.”
Mr Holzman said the Check-in collapsed with at least $4.4 million in debt and just $120,000 in the bank. There were around 5300 creditors – 4000 of them consumers who had pre-paid for accommodation, about 1300 accommodation providers and a number of other suppliers.
It’s likely none of them will get paid a cent from a company which in its final year of operation turned over $50 million.
“A lot of people unfortunately believe they will get their money but they won’t,” he said. “I’ve had people stranded overseas, families calling from hotels where they are being asked to pay again. It’s really, really sad.”
However the biggest creditors are hotels, with one large group owed $175,000. Mr Holzman these figures were provided by the former management of Check-in, which had in many instances proved to be under-estimating the financial damage.
“We still don’t know the precise number. Their accounts said one one guy was owed $400 but the real debt was $28,000.”
In terms of how the company operated, Mr Holzman said more than 50% of its revenue was spent on Google AdWords. “Check-in was spending huge amounts on Google,” he said. “You’re probably looking at $500,000 a month, sometimes more.”
However, Google is not a creditor. Its bill was paid every month by automated withdrawal.
8 weeks?
21 may to 18 June is 4 weeks
I imagine a few sore heads today after the launch party of check-in.com.au 2.0 last night…
Thanks. I made the change. It was a busy day.
Have tried calling check-in.com.au number times in the last few days, will not remove us from the website. We have no rates listed with them or passwords to change.
The team members are just on auto with the response “repeat 3rd party wholesaler is feeding us the property info”. The Operations Manager is just a puppet and will not advise who the wholesaler is and provides no assistance. Majority of the information is incorrect on the listing including our property name.
We have written and telephoned numerous times to Leonie Mee of Check-in.com.au asking very politely to remove our listing. This has been refused and our property is still showing.
When questioned as to where are they getting their rates from, their response is that the rates are from a wholesaler, yet the rates they are showing are our last minute rates that were previously showing before they closed the first time. This is obviously a fabricated story as we know they are not our wholesaler rates.
If we try to log in using our old details we go to a page that requests us to register – I have not registered, yet all our rates are still showing. It is 100% bookable – I also do not know where they are drawing their allotments from.
We will not be honouring any booking from this company. However, what it will mean is that clients will be paying Check-in a deposit (15%) but as we do not have any contract/agreement with Check-in the clients will not have a room.
They are/will be taking money from guests, but do not have a product to sell.
Greg
Do you supply Expedia any rates or inventory?? If so, that may be the missing link in the puzzle??
I’ve heard something similar and put it to Adir Shiffman, who heads up new owners Allied Consolidated, but he would not confirm.
I doubt you will know the booking has originated from Check-in.com – i assume the notification will arrive at your property via the wholesaler who is supplying the inventory (technically it is their rates and inventory which have been purchased) and you will be none the wiser until the guest arrives with paperwork.
As the guest will be paying you direct for their stay (less commission of course) is there any reason not ot honour the booking? I think you’ll find you could be in serious trouble with this ‘mysterious wholesaler’ as you have an agreement with them and many of these allow them to ‘onsell’ or ‘relist’ your product as they see fit if you check the fine print. They’ll take a cut, checkin will take what’s left but ultimately you will get the same payment from the guest as you would had they booked through Expedia or the like on similar payement models.
At the end of the day, you can’t punish the innocent consumer and need to take up concerns with Checkin.com… if they’ll listen.
We had this very issue well before Check in.com collapsed. Our motel was listed with Check in.com despite us having severed our relationship with them the year before due to them not being happy with us having a hiogher rate on their website compared to our listings on others. Our listing was incorrect in that the photos of the room types weren’t even our rooms. It took me weeks but I finally got it out of them that the wholesaler was Expedia (who we do have a relationship with and was able to contact them to remove the photos which they did). We would receive Check In.coom bookings (very few I might add) via our Expedia channel and would know when it was a Checkin.com booking because the address provided for the guest was simon.issacs@checkin.com.au. We always honoured the booking because our guests are not required to pay up front when booking through the Expedia channel. I couldnt understand why Check in would do this because the commission paid to Expedia is less than what we had to pay Check In.com when we were listed with them. Our relationship with Expedia is great and we couldnt be happier. Again we appear to be listed on Check In.com.au but as long as I dont have to pay commission to them or have to invoice them for payment, Im not going to bother with trying to remove us off their website. I see it as another internet site we have a presence on and bookable. Its unfortunate that it is on a site that has such a poor business reputation etc.
Maybe it is time for all accommodation providers to bombard their federal members in their areas and see if we could get an amendment bill through that requires all booking agents to hold guest monies in trust account
” If a hotel doesn’t want to be there they should contact us and we will take them off”
Looks like Adir’s first impression fits right in the check-in ethos.
Good to see that leonine hasn’t changed at all
This is outrageous and they are getting away with it
Dan
I am aware that this issue is being escalated to the federal shadow minister for tourism, today (21st June). Not sure what the outcome will be. Its best you direct your concerns towards the TTF, AHA or AAOA bodies who can speak on behalf of all its members, direct at a federal level. Together we have more power and more chance of changing the laws to protect our industry.
The oaks Hyde park plaza is owed over 6 thousand by the old check-in.
Today they are listed on check-in as a full payment hotel.
What is going on?
[…] anymore. First, there was the collapse of Check-in.com.au. Then came last week’s profit downgrade from industry leader Wotif […]