Aussie travel investors get a European tour from hell

“Nobody expects the Spanish Inquisition!” was the famous Monty Python cry.

That was certainly the case for one of Australia’s most successful tourism businesses: ASX-listed Web Travel Group.

It all sounded pedestrian enough last Friday when the group informed the ASX that “the Special Delegation of the Balearic Islands of the Spanish Tax Agency has commenced an audit of its Spanish subsidiary in respect of direct taxes,” dating back three years.

A dusty little Web Travel office in Mallorca, the port city that was once a byword for British package-tour hell, and one-time refuge of the late Australian businessman fugitive, Christopher Skase.
What’s the big deal, right?

What followed was a level of market mayhem worthy of a Monty Python skit.

Web Travel shares crashed 41 per cent to an 11-year low, wiping hundreds of millions of dollars off its market valuation in the process. It was the sort of reaction you would expect for an extinction level event, not a standard audit by tax authorities.

As a shell-shocked boss John Guscic told investors on Monday, having signed off on the announcement while in Tunisia for work: “I went to bed on Thursday night as the market was about to open with a view that we just signed off on a straightforward, non market sensitive ASX release to keep the market appropriately informed.”

He woke up to a CEO’s worst nightmare.

“The market had obviously drawn a much broader and inaccurate conclusion about the content of the release, and we could have ever anticipated it would appear the assumption is we are facing an existential crisis,” Guscic said.

But the Web Travel team should have known better with investors still reeling from the unfolding disaster at one of Australia’s other globally successful travel operators, Corporate Travel Management.

As one analyst pointed out: “The revelation could not have come at a worse time. Investors in the Australian travel intermediary industry are still dazed over Corporate Travel’s accounting irregularities and customer overcharging in Europe/the UK – a saga that has frozen Corporate Travel shares since August 2025.”

Corporate Travel needs to restate its financial accounts going back years and determine if it overcharged clients, including the British government, more than the $160 million it has uncovered to date.

Its lucrative Australian government business is undergoing an independent audit and company founder Jamie Pherous stepped away this month with no clarity on if its shares would trade again. There is no suggestion Pherous was personally involved in or aware of the overcharging.

It’s a long way from Web Travel’s Balaeric concerns, but there is good reason for market caution – as shown by the fact that its stock trades at a significant discount to where it was before the Spanish inquisition kicked off.

But Web Travel’s management were always going to be caught between a rock and a hard place on this issue.

The reason they took the unusual step of announcing this audit was that the “the Special Delegation of the Balearic Islands of the Spanish Tax Agency” didn’t just send a letter through the post.

It showed up at the company’s office with around 12 agents. We know this because local media just happened to witness and photograph the entire operation with reporting that included alarming phrases such as “alleged tax fraud”.

Web Travel is understandably commenting as little as possible. Anything they say would only antagonise the authorities. A little bit of research indicates Spanish tax authorities are not to be messed with.

Late last year, Robert Amsterdam, founder of US law firm Amsterdam & Partners, warned of a “rule of law crisis” within Spain’s tax system which some describe as a hangover from the country’s days under the Franco dictatorship.

“Spain hasn’t passed a new national budget since 2022 and is using the Spanish Tax Authority to shore up the country’s finances by incentivising tax collectors through a shady bonus system. It’s not only unethical, but illegal in our view,” he said in a widely reported interview on the matter.

Web Travel has not said how much of its European revenue, which generates one-third of its overall business, is channelled through Spain.

The company, which used to own Web Jet, acts as an accommodation-selling middleman between hotels and travel agents, which means it is also facing AI concerns and the threat of disintermediation by its partners in this travel eco-system. But that’s a story for another day.

Right now, Web Travel just needs to deliver on the promise that there is no change to its financial outlook and avoid the kind of rolling disaster at Corporate Travel that might cost its investors billions.

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