Luxury online tour operator Luxtripper, which went into administration in October 2023, failed owing £11.9 million including more than £9.1 million to customers.

That is the estimate of administrators working for ReSolve Advisory, appointed on October 27, in a recently issued Statement of Proposals to creditors.

The joint administrators note these liabilities are “subject to adjustment should additional claims be received” and the accounts have not been subject to audit so “we cannot confirm their accuracy”.

The CAA renewed Luxtripper’s Atol in September 2023 despite the administrators noting: “By October 2023, the cash position of the company had deteriorated to the extent that…salaries could not be paid at [the] month end.”

However, the company’s accounts on which the Atol was renewed showed a profit of almost £1.1 million for the 12 months to March 2023. This was achieved through a sizeable increase in ‘intangible assets’ from £626,000 in 2021 to £3.6 million in 2023. Without this, the company would have shown a significant loss for 2022-23, despite the ending of pandemic restrictions on travel.

The impact on the Air Travel Trust Fund of the £9.1 million in refunds owed to consumers is likely to be reduced to £4 million or less, with 60% of customer claims expected to go to credit card companies.

However, the scale of Luxtripper’s non-Atol business remains unclear, with industry sources believing the company was selling non-licensed packages. The administrators warn they “do not anticipate any distribution” of funds to the 1,185 unsecured creditors – customers, suppliers and shareholders, including many former senior industry executives. The company also owes £277,000 in unpaid wages and £400,000 in tax to HMRC.

Luxtripper chose to expand during the pandemic, trebling its staff to 155 (Travel Weekly, October 26, 2023). The administrators note the company secured £1.2 million in ‘angel’ investment in 2020 and “took the decision to continue to trade during the pandemic” despite not being eligible for a government CBILS loan.

The resulting losses left Luxtripper requiring fresh capital in 2022 and by April 2023 the company “was in distress”. One industry source told Travel Weekly: “Financially, the business made mistake after mistake.”