One of Hong Kong's leading tour agencies, Hong Thai Travel Services, will go into liquidation, its parent company announced on Friday – with the Covid pandemic blamed for pushing the business into the red.

The news comes two days after the company said that it would put all branch services on hold until further notice and revealed that it would cut costs to the bare minimum in the hope of surviving until all border restrictions are lifted.

But in a notice on Friday, its parent company, mainland-based Caissa Tosun Development, said the board of directors had passed a resolution a day earlier to initiate voluntary liquidation.

The parent company said the pandemic had put Hong Thai into the red and left it unable to repay its debts. It said the voluntary winding-up procedure would allow Hong Thai to handle debts fairly and protect the rights and interests of the company, shareholders and creditors.

Caissa said liquidating Hong Thai would reduce the burden on its own operations and would not affect the parent's ability to continue operating.

According to the notice, Hong Thai posted losses of almost 4.7 million yuan in the first half of this year.

Founded in 1966, Hong Thai has been one of Hong Kong's oldest and largest travel agencies, with business in the SAR, Guangdong and Macau covering tours, package trips, cruises, and overseas weddings, among others.

In its announcement on Wednesday, Hong Thai said the Hong Kong government's decision to drop hotel quarantine for incoming travellers last month had brought hope, but was not enough. It also noted that more travellers were booking trips independently rather than joining tours.

It also said many staff had left the industry during the pandemic.

The Travel Industry Authority, for its part, said it is now dealing with the case.

It said it has received 24 enquiries as of noon on Friday, adding that customers who have bought packages from Hong Thai can apply for a compensation from the Travel Industry Compensation Fund.
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Last updated: 2022-10-28 HKT 21:57