Israel, Egypt and Jordan specialist Destination Red Sea has ceased trading after the Gulf crisis caused a dramatic slump in bookings.
Managing director and owner Philip Breckner took the unprecedented step on Friday of walking into the Civil Aviation Authority’s London offices and asking it to call the company’s ú600,000 bond.
Breckner said a lack of bookings had led to a cash-flow problem. Destination Red Sea already owed money to overseas hoteliers, but Breckner decided to cease trading before debts spiralled out of control. He estimated he could have lost another ú100,000 in January if he had continued trading.
“I could have kept going, fobbing off hotels about payments, but that’s not the decent thing to do,” he said.
In an exclusive interview with Travel Weekly, an emotional Breckner told how he informed his 25 staff at the Barnet offices they were being made redundant and the company was finished.
“I called one of my managers who was aware of the situation and told him to stop taking bookings and to take everyone to the pub,” recalls Breckner. “When they came back, I stood in front of them at 5.30pm and cried. It was like a funeral because it wasn’t a company, it was a family.
“They worked so hard and were so determined to make it work that we only shut on Christmas Day. People turned up to help me clear up on Saturday. I told them I couldn’t pay them and they said they didn’t care, they just wanted to be there.”
Breckner formed Destination Red Sea from the ashes of collapsed Twickers World in 1995. The company was licensed to carry 14,000 passengers.
Breckner said the first crisis was the Luxor massacre in November 1997.
“It hurt me commercially,” he said. “I spent around ú50,000 in the next 12 months just promoting Egypt.”
The minor Gulf conflict in February 1998 also had an impact, but it was the West’s two clashes with Iraq on November 15 and December 20 which sealed Destination Red Sea’s fate.
“Each crisis cost me ú20,000 plus the resulting drop in bookings,” said Breckner.
“We were already down by 70%-80% and after November 15, there was a total stoppage of bookings to Israel. We also had to refund clients and we started having cash-flow problems.
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