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StumbleTravel site sued by several casinos files for bankruptcy
Monday, Aug. 31, 2009 | 3:10 p.m.
Beyond the Sun
A Las Vegas company that books hotel rooms and sells vacation packages online has filed for bankruptcy reorganization in a case involving numerous Southern Nevada hotel-casinos.
TravelWorm Inc. in its Chapter 11 filing Aug. 13 in Las Vegas didn't say why it's seeking bankruptcy protection. A message for comment was left with the company Monday.
Financial difficulties, however, are evident in lawsuits pending against the company in Clark County District Court.
Several lawsuits have been filed in that court against TravelWorm and subsidiary Jetaway Today involving disputes with business partners including the Sahara hotel-casino, Emerald Suites LLC, Black Gaming's Mesquite casinos and the downtown Plaza and Las Vegas Club hotel-casinos.
Black Gaming, for instance, said in an August 2008 complaint that TravelWorm owed its Oasis hotel-casino nearly $40,000 for rooms booked through TravelWorm, the Virgin River property was owed nearly $50,000 and the CasaBlanca was owed about $44,000.
The Plaza said in the same suit it was owed more than $96,000 and the Las Vegas Club said it was owed more than $17,000.
The Black Gaming, Plaza and Las Vegas Club properties all said their executives were repeatedly assured last year by Jay Rein, identified as TravelWorm's chief executive, that they would be paid -- but the money never showed up.
And Emerald Suites, in its March 2009 lawsuit, said TravelWorm owed it more than $25,000 for rooms guests had booked for its Las Vegas properties through TravelWorm.
In its bankruptcy filing, the company didn't reveal financial details except that its assets are worth less than $50,000 and its liabilities total from $1 million to $10 million.
Unsecured creditors listed in the filing include Buffalo Bill's ($93,000), Casino Royale ($109,000), the Edgewater in Laughlin ($96,000), the Excalibur ($93,000), Fitzgeralds ($81,000), Four Queens ($79,000), Hooters ($95,000), Imperial Palace ($76,000), Palms ($86,000), Plaza ($91,000), Riviera ($71,000), Sahara ($300,000), South Point ($71,000) and the Stratosphere ($88,000).
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A few years ago my organization did about $5,000 worth of business with Travel Worm. What a disaster! Reservation never were sent to hotels, telephonic customer services was sub par, and their internet customer service portal was woefully behind the times. Although it was possible to get very good rates, Hotels.com and other competitors simply wiped the floor with the hapless Travelworm. I hope all the liabilities get paid in full, but I doubt those who "THE Worm" (as we used to call it) cheated will ever see the majority of the balance owed.
This maybe just the tip of the Iceberg on some of these fly-by night sites. The Casinos will probably get stiffed, because of malfeasance.
What a racket. I cannot believe all these casinos let them get that into them.
travel worm is not a fly by night site diamond....has been around for quite a few years......I have used it in the past with good results.....just another victim of the current times
all these 3rd party things attached to tourism are going under.
Let's not forget that, with the glut of roomnights available and total visitor volume down, hotel/casinos will continue to take the bait when offered bookings by any and all in the "tour and travel" booking business. This will happen again; the desperation to fill rooms will assure it!
It's interesting that the Sahara got hit the hardest.
I prefer dealing directly with the hotel or national hotel company (Super 8, Choice Hotels, etc.) when booking a room. When we stay in LV, we always book directly with the property we stay at. I've done business with 3 of the listed properties. Always got a good deal going direct. I do notice that none of the high or even middle-high LV properties are on the list. Maybe Palms, but the rest are in the budget to mid price category. Some are very nice, but this site seemed to go after the price shopper. I would say always use a legitimate travel agent, or deal direct, even if it costs a couple bucks more.
I agree with smoke14. This was not a fly-by-night company. As a hotel manager, I worked with Travelworm for over 12 years. And, yes, my hotel did get burned, also, but the amount was not nearly what these other companies are reporting. This is an example of what we are seeing in the recession. Businesses are just having a hard time in almost all industries, and some are not going to make it.
Also, Bakersfield is correct. Dealing directly with the hotel is many times a better option. But if you can get an airfare/rental car/tour/hotel package, then you can get better deals with third party companies.
Skart, I like your responses. One can learn a lot by reading the responses left by those who are in the business. Just curious, what is the normal percentage a hotel pays a site like TravelWorm or others for sending the business? Also, what is the normal time it takes the hotel to get paid? Either Sahara got a lot of business this way, or they allow the payments to be delayed by weeks or months. As a hotel operator, do you have to market to the internet sites to get the bookings?
A hotel usually negotiates a "net rate" with a site like this. For instance if your selling rooms for $100.00 you would have a certain markup that travelworm would sell your rooms at usually 20 or 25%, so they would pay $80 to the hotel and sell the room to you for $100, making $20 per night plus whatever stupid fees they add on. Then they take 45 days to pay there bills and sonce they charge the guest when the reservation is booked they can then do all sorts of things (investments) with the money until you are paid 45 days after check out.
Aesop, Another reason to deal direct with the hotel. Then any issues a customer may have cannot be "blamed" on a third party. I'd rather the hotel get the whole 100 anyway. Unless it is a legitimate travel agent who really does look out for the consumer, and has a good standing reputation for paying their bills. A 45 day float is unreasonable for a hotel to have to wait.
I just went to the web site and it is still booking Vegas rooms at all casinos, including the Sahara! Go figure. Think a few people will get screwed when they book then show up in Vegas to find they have no room!
I have used Travelworm. And, yes, I am a value shopper. From my perspective as an end user, Travelworm always delivered as promised, and I was happy to use their service.
One of their curious policies was a very liberal cancellation policy. You could cancel your res within a few days of the checkin date, WITHOUT PENALTY. Great for the consumer but probably not so great for Travelworm since they probably ate a lot of those late cancellations.
To add to aesop79sfg, as most recent visitors to Las Vegas know, that hotel room that was a $100 last year is probably selling now for $65 or even $50. Most hotels demand that third-party sites contract not to sell a room for less than the hotel does. So that $20 profit can go south in hurry when the hotels drop prices to fill rooms.
I had a samiliar experience last year. I booked a room through a different company that went out of business shortly after my reservation making. The money was gone but the hotel recognized my reservation. I was asked to pay upfront once again, which I did, and, fortunately, my credit card company gave me a refund for the initial payment of the first reservation. don't know if it was paid back by the broke online company or by a insurance company. Credit Card companies know about such possible defaults and the consumers are protected to a degree as online reservations are a huge business.
Anyway, I think i will keep my eye open for promotions directly by the hotels and avoid unexpected surprises. Might be the way to go.
From Switzerland
I know the CEO and must say he s respectable and the Company was a great one as well.
But times are bad and Travelworm became a victim of it as so many others.
Its simply sad but the show must go on!