Dream holidays shattered in $4.3 million travel agency collapse

Australian travellers who collectively lost millions of dollars after their travel agency collapsed are calling on the federal government to overhaul consumer protections in the travel sector.

Melbourne-based agency AVG Travels, which sold discounted international tour packages to Asia, Europe and Africa, was placed into liquidation in May.

New documents lodged with ASIC show the company owes $4.3 million to nearly 800 creditors — including customers, employees and suppliers — while holding just $83,000 in assets.

Liquidator McGrathNicol told those affected AVG Travels was unable to provide refunds.

The collapse has prompted a petition with more than 1,000 signatures calling for stronger safeguards for those who book through travel agencies.

Among the signatories are AVG Travels customers who are urging the federal government to reinstate a national consumer protection scheme for travel bookings, known as the Travel Compensation Fund (TCF).

The scheme, once mandatory for licensed travel agents, would have compensated travellers for insolvency, but was abolished in 2014 to cut red tape.

The petition was launched by Arun Jhunjhunwala, whose extended family group of 45 people across 15 families lost their holiday to China in March next year, after AVG Travels collapsed.

The group are $60,000 out of pocket.

"There was no prior warning, no communication about their deteriorating financial position and no offer of refunds or alternative arrangements," Mr Jhunjhunwala said.

The company's membership with the sector's peak body, the Australian Travel Industry Association (ATIA), was cancelled in August 2022 for failing to meet required "financial and ethical standards".

Another Australian agency, Traveldream, also collapsed just over a year ago, leaving travellers stranded overseas and out of pocket.

"This isn't just about AVG — it's a systemic failure in the way the travel industry is regulated in Australia,"

Mr Jhunjhunwala said.

"When these companies collapse, people are left as unsecured creditors with little to no chance of recovering their funds."

Inside the collapse of AVG Travels

AVG Travels owner and CEO Duc Tiem Dao, also known as David Dao, established the company in Vietnam in 2012, before opening offices in Melbourne in 2015, and Japan and the UK last year, according to the company's website.

Documents filed with the UK companies register show his company, AVG Travels UK Ltd, changed its name to Alder Journeys Ltd on May 26, the same day the Australian company was placed into liquidation.

It's website Alderjourneys.com is online, with the site stating it is "launching soon".

Mr Dao, a Vietnamese national, has now listed his Melbourne home for sale for $3.5 million. The ABC has contacted Mr Dao for comment.

A former employee, who asked not to be named, said the weeks leading into the collapse were "chaotic".

"We were a team trying to work through a tsunami of a situation that we just could not withstand," they said.

The former employee said the small crew of Melbourne staff would sell travel and answer customer's inquiries, while airline ticketing was handled by a single staffer in Vietnam.

"To have one person issuing close to 3,000 airline tickets in May was just insane."

China nightmare

Perth retiree Paul Beard had dreamed of visiting China for years.

When he saw AVG Travels advertising what appeared to be a bargain 11-day Terracotta Warriors tour, he thought he had found his chance.

After researching the company and reading "glowing reviews" from previous travellers, Mr Beard paid $3,569.

He said customers were told flight tickets would not arrive until four weeks before departure, so he was not concerned when he initially heard nothing.

But when that deadline passed, he began contacting the company.

"From that moment on, I was basically given the run-around every day for weeks," he said.

"Then, of course, it all went crash."

Mr Beard said the experience had left him frustrated, but he was also conscious that many customers had lost far more than he had.

"I'm not wealthy by any means and $3,500 is a lot to lose," he said.

"But some people have lost an absolute fortune."

The Australian Travel Industry Association said consumers should ensure their travel agents are accredited with the peak body.

The ABC has contacted the Assistant Minister for Productivity, Competition, Charities and Treasury Dr Andrew Leigh.