I read this morning that a company called Conquest Vacations closed its doors yesterday without a hint of a warning to any of its customers. To make matters worse, some of their customers are in the middle of their vacations and are being kicked out of their hotels or being forced to pay additional fees to the hotels. The company's website says that all of the travelers will be taken care of, but the stories coming out of vacation destinations seem to be to the contrary. Hotels are forcing guests to pay up to $1,000 more to stay in the hotel because they have not yet been paid by Conquest. This is quite a predicament.
The current closure of Conquest goes back to a decision that was made over a year ago when deciding on how many airplane seats and hotels rooms to buy. As these seats and rooms must be paid for in advance, Conquest now has no money to operate and no ability to receive credit. They also significantly underestimated the downturn in the economy and were left with too much inventory to sell. Was this an effective decision? It is hard to criticize, but this is a company that has been around for more than 35 years in a very competitive industry. It sounds like a case of unnecessary risk-taking and not understanding the direction in which the economy was going. Just another example of how ineffective decision-making can lead to dire results for companies and their employees. The good news for Conquest's competitors is that the competitive landscape just got smaller.