When Happy Vacations ceased operations last week, two things immediately happened: Agents scrambled to find alternatives for clients who had made deposits or full payments on upcoming Happy trips, while competing tour operators scrambled to help the agents rebook.
Happy Vacations, based in Watsonville, Calif., is in the process of filing Chapter 11 bankruptcy, according to a notice posted on the company's website. After a 40-year run, Happy said on April 20 that it had ceased operations as it underwent reorganization.
A specialist in destination weddings, honeymoons, family, golf, adventure, spa and vacation packages to Hawaii, Mexico, the Caribbean, Costa Rica and the South Pacific, Happy Vacations said it had been in discussions with a number of interested parties to add more capital or buy all or part of the company. But, the company said on its website, it had not obtained the necessary funds to remain in operation.
It remained unclear how many deposits or paid-in-full bookings Happy had on the books when it shut its doors.
Natalie Insalaco, co-owner of Millennium Travel on Staten Island, N.Y., was among the agents who had business on Happy's books: two couples with honeymoons to Tahiti booked through Happy coming up in the next few weeks. Both paid in full by check, one for $10,000, the other for $15,000.
"What are we going to do?" she wondered.
None of the money was paid to Happy's suppliers, she said, so "They are not letting the people check in. I'm in a frenzy."
Insalaco said she'd been working with Happy for years and did not see this coming.
"The rep from Happy Vacations was in here two weeks ago and brought us all new brochures," she said. "I could care less about my commission. It's going to cost me out of pocket $25,000. Let me tell you something: Had it been five more bookings, it could put you out of business."
'Left to pick up the pieces'
Travel Weekly contacted Happy Vacations President Dave Marshall by email, but an attempt to interview him was unsuccessful.
Rick Garrett, president of Travel Pacific and president of Happy Vacations until 18 months ago, wrote in an email to Travel Weekly: "I'm sad for my fellow travel agents, who like myself are losing earned commission that we counted on to pay our bills and are left to pick up the pieces for their clients booked with Happy who haven't traveled yet, maybe even having to come out of pocket to make good on failed promises."
Garrett had served as president of Happy for 28 years until his family sold the business in November 2007 to Marshall and Dick Sargeant.
According to Garrett, Marshall was from Hawaii, where he owned an online retail travel agency called Hawaii on Sale, and Sargeant had at one point headed up Hawaiian Airlines.
In 1969, Garrett's grandfather, Thomas Bohner, founded the Alpine Travel travel agency in Saratoga, Calif., and two years later formed as a subsidiary, Happi Tours, specializing in Hawaii. The company later came under the ownership of Linda and Jack Garrett, Rick Garrett's mother and stepfather.
In the 1980s, the company transitioned into a vacation packager, and between 1989 and 1993, it expanded into the Caribbean. In 1995, the company changed its name to Happy Vacations. Three years later, it expanded into the South Pacific.
Rick Garrett and his wife still own Alpine Travel.
Rick Garrett said he was "sad for the guy who orchestrated this whole mess," but did not specify who at Happy he believed was responsible for the company's demise. "He will lose everything in the process to come."
Other operators step in
"It's really too early to tell" how many people have been affected, said Pleasant Holidays President and CEO Jack Richards. He said that call volumes have been up between 20% and 25% since the news broke, mainly from agents trying to rebook their clients. The Westlake Village, Calif.-based Pleasant specializes in most of the same destinations Happy offered.
"Whenever a tour operator goes out of business it's bad for the industry," said Richards, adding that Pleasant has already contacted all the major hotels Happy was working with and negotiated the same or better rates.
Since Happy is not a member of the U.S. Tour Operators Association, and thus not subject to its $1 million customer protection bond, Richards advised agents and clients seeking to reclaim their money to look into the protections under the California Seller of Travel Act, which requires that travel sellers based in the state put aside a trust account containing the payments of travelers.
Happy's current owners could also face charges under the California law.
Pleasant is among a flood of tour operators and travel companies that jumped in to assist former Happy customers with their travel arrangements.
Within 24 hours of the Happy closure, Funjet Vacations, Classic Vacations, Travel Impressions, NWA WorldVacations, Goway Travel, Gogo Vacations, Apple Vacations, Blue Sky Tours and Air Tahiti Nui had all released rebooking offers, discounts and assistance information to former Happy clients.
According to Scott Pinheiro of Santa Cruz Travel, an agency located not far from Happy's offices, Marshall had within the last few months let Pinheiro's agency know "that they had a problem."
"The bummer is, from our standpoint, that the other preferreds are large, corporately owned [operators], and the beauty of Happy was it was truly mom and pop," Pinheiro said. "It's a sad day."