World

Mon May 19

An online travel company just collapsed. Here’s how to avoid being left stranded by an online deal

Written by: Madalyn Scerri, Senior Lecturer in Tourism and Hospitality, Torrens University Australia

Traveldream.com.au sold discounted holidays – curated hiking tours, boutique cruises and cultural getaways through a slick website and polished social media ads ^[1]. But news emerged last week that the Melbourne-based travel company has collapsed into administration ^[2], leaving customers out of pocket by thousands of dollars, and in some cases, stranded overseas ^[3].

What many didn’t know was that Traveldream hadn’t been formally accredited ^[4] with the leading industry body since 2020. Its status under the Australian Travel Accreditation Scheme ^[5], run by the Australian Travel Industry Association, had been cancelled.

To make matters worse, most travel insurance policies don’t cover insolvency ^[6], meaning many customers have no way to recover their losses ^[7].

The Traveldream website has been updated with a message from the administrator.

Australians are expected to spend over A$2 billion ^[8] booking holidays online in 2024–25.

Big name platforms such as Booking.com and Expedia account for about 60%^[9] of this activity. But many travellers are also turning to smaller or lesser-known providers offering flashy deals and lower prices, often with fewer safeguards.

So, how can you protect yourself? Start with these five checks.

1. Don’t be swayed by slick websites or social media ads

It’s a common tactic, and one that’s hard to resist. You’re scrolling, you see a dreamy image, the price is tempting, and suddenly you’re halfway through checkout.

But a polished ad doesn’t guarantee legitimacy.

Travel-related scams ^[10] are on the rise ^[11], especially involving online-only sellers ^[12].

couple relaxing on tropical beach at sunset in hotel

Ads on social media for idyllic vacations can be tempting, but check the fine print. Song_about_summer/Shutterstock ^[13]

Check for a verifiable business address, phone number and customer support. If the deal feels vague, under-priced or overly urgent, that’s a red flag.

Look for independent reviews (on Trustpilot, Tripadvisor or Google), and check Scamwatch for known issues.

2. Look at how the company engages with customers

A company’s reputation isn’t just about what it promises: it’s built on how it responds ^[14] to questions and complaints. Before booking, take a moment to see how the business interacts with customers online.

Do they reply constructively to complaints? Do they offer updates or explanations when issues arise?

Also notice the tone. Does it feel human and responsive ^[15], or generic and hands-off? That can suggest how they’ll treat you after the sale.

Small signs can speak volumes. A page with thousands of followers but no visible engagement may indicate a paid audience – and a company that vanishes when things get difficult.

3. Check if the company is accredited

Another way to assess a travel company’s credibility is to check if it holds formal accreditation. This signals the company has met standards in financial security, customer service and dispute resolution.

Search the Australian Travel Accreditation Scheme register at https://www.atas.com.au ^[16], or look for Quality Tourism Accreditation ^[17]. For overseas providers, check for recognised local schemes.

Accreditation offers extra reassurance, but it’s not the whole picture. Some large, reputable companies, such as Expedia, operate without it. If a company isn’t accredited, proceed with caution and focus on how bookings and payments are handled.

4. Scrutinise policies carefully

Before booking, check what happens if the provider goes bust, whether you can cancel or reschedule, and how your booking will be confirmed. Where possible, follow up directly with the hotel, airline or tour operator to make sure reservations are secured.

Cropped back view of woman entering hotel room and holding suitcase

Booking directly with a hotel or tour provider can ensure you are getting up-to-date availability. Media_Photos/Shutterstock ^[18]

It’s also important to understand what travel insurance does – and doesn’t – cover ^[19].

Company insolvency is one of the most common exclusions ^[20]. Unless a policy includes “end supplier failure” or a similar clause (most don’t), you may not be able to claim a refund. Always read the Product Disclosure Statement to check exactly where you stand.

Another safeguard is to pay with protection in mind. Although conditions vary by provider, credit cards may offer chargebacks ^[21] if the goods or services aren’t delivered.

5. Book direct where feasible

While accredited travel agencies can be helpful for complex itineraries ^[22], like overseas trips with multiple stops or bundled services, it’s often worth booking directly with the provider when making travel arrangements online, whether that’s a hotel, airline or tour company.

Cutting out the intermediary can offer better value, including complimentary extras, flexible cancellation and full access to loyalty programs.

Direct bookings usually reflect real-time availability and pricing, reducing the risk of outdated information. You’ll benefit from direct communication and confirmation, making it easier to customise or resolve issues.

If something goes wrong, there’s also greater clarity about who’s responsible – offering stronger recourse under Australian Consumer Law ^[23].

The bottom line?

As more Australians book holidays online, it’s becoming harder to tell what’s trustworthy and what could leave you out of pocket.

Traveldream’s collapse is a reminder. Even in the world of digital travel deals, it pays to ask: is this company built to last, not just until your trip departs, but until you return home?