The weakness of the merchant payment model – where online travel agents take the client’s money before reimbursing the hotel minus their booking commission – has been brutally exposed by yesterday’s collapse of, which has cost many accommodation owners and operators thousands of dollars.

“This should be a seen as a lesson to ALL accommodation operators that the only model worth doing business on is an agent model where the client pays the hotel direct and the OTA is paid their commission post guest stay,” said Matthew Thomas, National Manager, Meriton Serviced Apartments.

“These merchant models are too risky… hotel owners and honest travellers shouldn’t have to deal with this – OTA’s spend too much money on advertising and SEO; It’s only a matter of time before they spend more than they make.

“A major shift to direct bookings should be the number one goal for every brand even independent operators.

“We are lucky we didn’t use them over the last few years, so have no financial woes to deal with.”

However, many others were not so fortunate, with the comments section on the original story jammed with tales of financial woe.

“We are owed over $3000  as guests have paid them directly and we can only invoice the amount after the guest has been and gone. I know many many other managers on the gold coast that have outstanding invoices too,” wrote one operator.

Other comments include:

  • “We have an accommodation business in the Blue Mountains and for the past number of months we have had to work REALLY hard at chasing our monthly payments!! This explains everything.”
  • “Many on the Sunshine Coast have been affected by this, too. Also telling people they have to pay again for their holiday is not pleasant. Happy to support Australian businesses but I don’t understand how this kind of business can operate without keeping clients funds safe in a Trust Account.”
  • “We have lost thousands of $$ and more than likely will never recover these funds. We have honored our commitment by supplying accommodation we should be paid.”
  • “We are an accommodation provider in Mollymook they owe us money for the last few months they refused to make the payments now i see why. For the last year they have been making excuses computer problems or best of all send us remittance that the payments have been made however never made it to our account.”
  • “I feel sorry for the staff that work for the company too. My friend works there and got into work yesterday and told sorry you no longer have a job or an income and received no warning or heads up that anything was wrong. Sad for hotels, customers and the good staff that were just doing what everyone was doing, trying to make a living.”
  • “Same story as the Accommodation Provider in Mollymook. We are owed over$1,800.00 for Guest accommodation from February to May inclusive. “

All those owed money are advised to submit an email ‘Letter of Demand’ to the appointed Administrator outlining monies owed so they can be listed on the Creditors Register.

Alternatively the Administrator can be contacted as follows: Holzman Associates, GPO BOX 3667, Sydney NSW 2001. Ph: 02-92229070 or Fax: 02-92229071. was placed in voluntary liquidation yesterday.

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