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Carrie Chan

Three plan legal action to recover their money from the defunct New Cathay

Thirteen travel agencies yesterday alleged the defunct New Cathay Hotel in Causeway Bay had defrauded them of more than $1.7 million in deposits from last December to February.

The agencies, which specialise in bringing mainland tourists to Hong Kong, said they had paid deposits ranging from several thousand dollars to more than $300,000 but were unable to secure the number of rooms promised by the three-star hotel.

Ten of the agencies yesterday reported the case to Wan Chai police station.  Three agencies are planning legal action.

Attempts to recover some of the money came to an abrupt end when the hotel closed in mid-March after it was acquired by  Hong Kong businessman Francis Choi Chi-ming's  Early Light International Holdings  for $200  million.

The agencies claimed they were never told about the hotel's closure.

The hotel's rooms will be converted into serviced apartments.

A hotel spokesman, who helped to wind down the operation, said the former owners were willing to honour the debts, but he claimed they came to  $1.1 million, not $1.7 million. He said Early Light was not responsible for any liability.

'We were unable to supply rooms because they all requested  accommodation for the  weekends,' the spokesman said. 'Discounting the number of rooms supplied [in that period], we should only owe them  about $1.1 million. But I can't tell how many rooms we had  supplied.'  He would not say when the money would be returned.

Travel Industry Council executive director Joseph Tung Yao-chung,  who helped to mediate in the case, said the hotel had probably overbooked.

'Usually, when the hotels were full, they would refer agencies to other hotels,' he said. 'It appears that the hotel had been overbooked. In some cases, a travel agency was promised 20 rooms a day but was only given a few rooms.'

Mr Tung said agents could seek the help of a hotel association  in most cases, but New Cathay Hotel did not belong to any.

One  complainant, Long Time Express' manager Jolly Koo, said  the agency had paid $80,000 in February for securing rooms in March.

'We were unaware that they would be closed in March. A manager told us we could be   reimbursed, but so far we haven't been,'  she said.

Hong Kong Hotels' Association executive director James Lu Shien-kwai  said it was an isolated incident because agencies usually  secured hotel rooms on specified dates once deposits had been paid.

The chairman of the Federation of Hong Kong Hotel Owners, Michael Li Hon-shing, said it would study how to prevent similar incidents. One option is a centralised body to register hotel operators.

A Tourism Commission spokeswoman declined to comment because police were handling the case.



Hotel owes us $1.7m, say travel agents