Harvey World Travel denies meltdown

SYDNEY – Harvey World Travel has strongly denied that the business is in trouble because of the imminent collapse of its parent, Stella Group.

Harvey World Travel said it is “business as usual” for its franchisees and customers, “despite misleading press to the contrary”.

Managing director of Harvey World Travel, David Rivers, says a story in The Australian’ on the company’s imminent demise is “complete fiction, and is factually incorrect”.

“The story has caused undue and unnecessary concern for a whole raft of stakeholders – from our extensive franchise network, to our customers and our suppliers,” said Rivers.


“The fact of the matter is Harvey World Travel is trading normally.

“Importantly, we follow strict industry governance in relation to client funds, which are held in separate client accounts, similar to a trust account.

“It’s the way we do business, and one of the reasons our financial systems offer levels of fiscal safety and security not seen in many organisations.”

The Australian reported that the Stella tourism empire, which owns the Harvey World Travel chain and manages one in five Gold Coast holiday apartments in Australia, is in danger of collapse, threatening to cost banking giant UBS hundreds of millions of dollars.

The report said that private equity firm CVC Asia Pacific and UBS are understood to have lost up to $1 billion on Stella after buying two-thirds of the struggling giant last year from the now-collapsed high-risk Gold Coast financier MFS.

Under that deal, UBS and CVC Asia Pacific pumped about $1.3billion into Stella, which controls more than 21,000 hotel rooms and 1200 travel agencies globally. That stake is now worth between $250 million and $350million, experts say.

Stella flatly denied that it had been advised to appoint receivers.

“Stella group rejects outright any suggestion that a recommendation has been made to appoint receivers,” chief financial officer Elizabeth Gaines said.

“It is unequivocally completely false,” Ms Gaines told The Australian through a spokesman. “It is business as usual.”

Stella’s expansion into the British market, which represents half its assets, has proved most costly, with spending on travel and accommodation plunging amid the economic downturn.

Stella operates the Breakfree, Peppers and Mantra Hotels holiday accommodation brands across Australia. The group also operates about 1200 travel agencies through the Harvey World Travel, Travelscene and Gullivers Travel Group.

The Australian says that if a receiver is appointed, it is likely to allow the operating travel companies to continue to trade.