Queenstown tour operators left in the lurch after travel company fails to pay out pre-lockdown activities

A Queenstown tour operator says they're in a heartbreaking situation, with many in the region still awaiting payment for pre-lockdown tours.

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The company which passes on the payments has frozen its operations. Source: 1 NEWS

The company which passes on the payments has frozen its operations, leaving small businesses tens of thousands of dollars out of pocket.

Glenorchy High Country Horses is one of the companies now facing an uncertain future, previously an experience people come thousands of kilometres to enjoy.

"I have had to drop down to nine staff but once this relief package ends, it will go down to five," boss Deana Insley told 1 NEWS.

"It's heartbreaking. I have all the horses and winter feed paid for but I don't have the wages there to pay my employees."

It's a problem many in the area are facing after Australian-based payment processing company, Website Travel, stopped paying out.

"I know of half a dozen that are owed more than $1 million, they've performed the service," Clusta-Southland MP Hamish Walker says.

"I know of one helicopter [company], they've had this huge cost of putting helicopters in the air now they're not getting it paid."

Companies like Website Travel take care of the transaction between tour agents and operators.

A tourist pays for an activity with the agent, that money is then held until the activity is done, and then the operator applies for the cash. 

But last month, Website Travel told its creditors it needed to raise $12 million both here and in Australia.

It aimed to have all outstanding payments made by early May, but Ms Insley is still waiting.

"The staff I have, which I consider our family - they're not corporate, they're family - they've had to look at having to move and to find other jobs to support their families elsewhere," she says.

In an email to operators, the group which owns Website Travel says its funding model has unwound during lockdown, and it needed to raise capital to repair the balance sheet. 

It says it's trying to resolve the issue as quickly as possible.

"This is not their money to spend so my argument is, where is it?" Ms Insley says.

Lawyer Graeme Todd says it's a significant problem in an area like Queenstown.

"It seems strange, obviously a very large sum of money has gone missing."

It's another blow for a tourism sector that is already struggling.