3 reasons why ACTE filed for bankruptcy
After 32 years of encouraging business travel, the Association of Corporate Travel Executives has ceased operations and will file for Chapter 7 bankruptcy.
In a heartbreaking letter to members, and the whole travel community, ACTE bids goodbye.
At a time when there’s such a great need for a diverse, global voice for our industry as it seeks to recover from catastrophe, it is with broken hearts that we must announce that we have filed for Chapter 7 bankruptcy and ACTE has ceased operations. The dual impacts of the cancellation of the Asia conference due to the security situation in Hong Kong and the COVID-19 pandemic cancellations have been blows that ACTE, as a small, non-profit association has not been able to withstand.
The employees and board members of ACTE have worked tirelessly to reduce costs and find a home for the ACTE community within a larger organization. Our discussions have been broad and deep with strong indication that we would be successful, but recent COVID-19 spikes have made investors and partners justifiably pessimistic around the viability of event-based organizations for some time to come. At this stage, the fiscally, and morally, responsible next step for us to do, is to cease operations and defer to a trustee to determine the distribution of payments to creditors.
For our members and sponsors, we want to say how deeply disappointed we are that we have not been able to continue our operations. When we opened ACTEConnect for the whole industry, we were inspired to see the resiliency of our community and the determination to rebuild. We regret we have not been able to find a lifeline to allow ACTE to continue to play a role in your recovery. It has been a joy to be part of this movement and we hope that the relationships you have made through ACTE continue and be fruitful for years and years to come.
The Board of the Association of Corporate Travel Executives
July 7, 2020
Below are the three main reasons why the beloved ACTE filed for bankruptcy:
Majority of ACTE’s revenue is from conference fees it organised. ACTE heads at least nine events every year. However, these conferences were cancelled left and right. First, the ACTE Global Summit that was supposed to be held in Macau on August 2019 was cancelled due to the protests that roiled Hong Kong.
In April this year, ACTE was supposed to host the New York Global Summit but was cancelled due to the pandemic. New York was the epicentre of the coronavirus infection in the US at that time.
According to the December 2019 ACTE filing with the U.S. Internal Revenue Service, in 2018, conference fees amounted nearly USD 5.1 million of the organisation’s USD 5.5 million total revenue. The rest were from membership fees. ACTE has more than 2,000 members at the time it ceased operations.
Unable to find a lifeline
Being a non-profit organisation, money is tight for ACTE and the organisation tirelessly sought for “a home for the ACTE community within a larger organization,” but the organization was unable to do so.
“Our discussions have been broad and deep with a strong indication that we would be successful, but recent COVID -19 spikes have made investors and partners justifiably pessimistic around the viability of event-based organizations for some time to come,” according to the statement. “At this stage, the fiscally, and morally, responsible next step for us to do, is to cease operations and defer to a trustee to determine the distribution of payments to creditors.”
The recent coronavirus pandemic seemed to be the last nail in the coffin for ACTE. The organisation has suspended its operations through May.
In a statement, ACTE cited the ongoing Covid-19 pandemic’s negative impact on travel demand. “Travel demand has sharply declined in this environment, and because of the impact this is having across the travel industry, we will be suspending our operations through May. This will allow us to position the organization to manage through these difficult times and move forward when the situation has stabilised.”
ACTE was founded in 1988, with its core mission “to provide the education and tools corporate travel managers need to support their businesses and build their careers while understanding the implications of ‘global’ within a business,” said Kurt Knackstedt, a former president of ACTE.
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