Luxe operators' troubles underscore need for precaution

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Jeri Clausing
Jeri Clausing

The recent troubles of two luxury tour operators that have left a global path of stranded travelers, unpaid suppliers and overdue commissions raises questions anew about what travelers and travel advisors can do to protect themselves.

Some of the first responses I heard from luxury agents and competitors when I asked about travelers and advisors discovering that the expensive prepaid trips booked through two JG Worldwide companies, Heritage Tours and Revealed America, had not, in fact, been paid at all was that the case underscored the value and need for advisors to work with preferred providers.

Unfortunately, many had. Natalie Renrow, for instance, said that when she set out last September to book her clients' $31,000 national parks tour, the luxury consortium Ensemble had just two suppliers that fit that bill: Abercrombie & Kent and Revealed America. She went with Revealed America because its hotels and activities fit better with what her clients were looking for.

Revealed America and Heritage Tours were also preferred suppliers for Signature and Virtuoso, at least until earlier this year.

Likewise, several customers who booked direct said in emails that they chose the companies based on being recognized in consumer travel publications including National Geographic and Conde Nast Traveler.

JG Worldwide company owner Jena Gardner has spent years cultivating relationships across the industry, with a heavy focus on luxury advisors. She held advisory board meetings every year that brought top advisors and luxury properties from around the world together in exotic locales. And one of her PR firms, JG Blackbook, represented some of the most luxurious properties and destinations in the world.

The fact that she was considered a friend and insider made reports about the long line of overdue bills and total silence about the situation from Gardner and her partner, James Saleh, all the more offensive.

It also underscored the need to get as much information as possible about what hotels and activities are being booked before final payment.

Lenrow says she got lucky after she discovered all her contacts at Revealed America were gone and no one was answering the phone when she began trying to track down final travel documents. Her contact at Ensemble was able to find someone from the company who had a spreadsheet for everything that was supposedly booked and paid for her client.

While she discovered that only a few small deposits had in fact been paid, she was able to recreate and rebook the itinerary in time for their July 2 departure. And she took the extraordinary step of putting it all on her own credit card, operating on faith that both the credit card company her client originally used to book the trip as well as the insurance policy she makes all customers get will eventually get the lost monies back.

While insurance doesn't generally cover fraud, some policies do cover instances when a company has gone out of business. Lenrow said she is counting on the clause in her client's Allianz policy that covers instances when "your tour operator, airline, or cruise line ceases all operations due to its financial condition, with or without filing for bankruptcy."

And of course, there is always the safety of booking with members of the USTOA, which was founded in the 1970s specifically to protect travelers from bankruptcies.

Today, the USTOA $1 Million Travelers Assistance Program -- which requires each member company to set aside $1 million of its own funds specifically to protect consumers' deposits and payments -- is recognized as the strongest of its kind in the industry.

Neither of the JG Worldwide companies were members, and there are many longstanding reputable operators who don't belong.

But the JG Worldwide fiasco is just one more reminder that when companies hit the skids, even longtime partners and friends can quickly become their biggest victims.

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