Fri, Sep 14, 2012 - Page 3 News List

Bureau orders Cathay Travel to cease operations

By Shelley Shan  /  Staff reporter

The Tourism Bureau yesterday ordered Cathay Travel Service to cease its operations after the travel agent bounced checks worth NT$3.54 million (US$119,000) on Tuesday.

The bureau said its banks informed it on Tuesday that they were unable to cash three checks issued by Cathay Travel and checked on the agency immediately.

In response, the agency’s employees told bureau officials their employer had always managed to keep sufficient funds in its bank account and make payments on time.

However, the funds had not arrived by the time the bank closed at 3.30pm.

The agency’s owner, Hsu Chun-hsiung (許俊雄), has allegedly fled to China, the bureau said.

The bureau found the agency had received a total of 26 Chinese tour groups this month, and 11 groups had left the country on Monday or Tuesday.

There are nine groups of Chinese tourists who have yet to leave the country, and another six groups that have yet to enter the country.

These 15 groups have been taken over by Jan-Ming International Travel Service, another local agency.

Media reported that Cathay Travel encountered financial problems because the Chinese travel agencies that organized the tours owed the agency more than NT$50 million.

However, the bureau found through its Beijing office that the Chinese travel agencies had all made their payments on time.

The bureau also found that Cathay was one of the 20 biggest travel agencies in the country that serves inbound tourists from China. Among 1.65 million Chinese tourists entering the country between January and this month, about 29,000 were served by Cathay Travel.

Bureau deputy director-general Chang Hsi-tsung (張錫聰) said that the agency’s financial problems may have resulted from its owner’s problematic investments in other businesses, including a drug store and a tour bus company.

Judging from the itinerary of the Chinese tour groups, Chang said Cathay did not seem to offer low-price tour packages because Cathay Travel customers all stayed in high-quality international hotels.

Chang also said that the bureau intends to closely monitor travel agencies handling inbounsd tourists from China, adding that it would consider raising the amount of guarantee deposits that travel agencies have to pay following this incident.

Currently, a travel agency has to deposit a guarantee of NT$1 million in the Tourism Bureau’s designated account in case the travel agent encounters financial problems and tourists consequently have problems continuing their tours or returning to their country of origin.

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