Traveling is wonderful, but being a part of it as a business owner has its challenges. Travel and tourism are very complex, and as such, they’re hard to navigate, both for travelers and service providers.
The travel industry fully recovered from the Covid-19 pandemic, reaching post-pandemic travel numbers in 2024. However, pandemic-like crises and lockdowns are not the only challenges disrupting such a large industry.
According to Hospitality Management, the main challenges the travel industry faces include:
- Rising cost of living and operational costs
- Managing natural disasters and climate action
- Political unrest and safety concerns
- Evolving consumer behaviours and expectations.
One major part of the travel industry is the vacation rental sector, which has risen in popularity over the last decade, mostly thanks to popular home-sharing platforms such as Airbnb.
Travelers are attracted to these properties because they are more affordable than hotels, suitable for families with children and pets, and provide more comfort and privacy. As many as 64% of travelers prefer vacation rentals over hotels, writes Grand View Research, citing data from TurnKey Vacation Rentals’ 2019 poll.
The US vacation rental market accounted for a 19.6% share of the global vacation rental market revenue in 2023.
However, not everyone is able to survive running business legally in such a huge industry full of many challenges.
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Florida vacation rental company controversy and lawsuits
Popular vacation rental company based in central Florida, IPG Franchising, was investigated for months by Gulf Coast News and is facing multiple lawsuits.
IPG Franchising was attracting investors who wanted to acquire a contract to manage vacation rentals. It was also offering property management franchises designed to help individuals from countries with an investment treaty with the US obtain an E-2 Visa.
Related: Local Texas restaurant chain files for Chapter 11 bankruptcy
The E-2 investor visa enables individuals to enter and work in the US based on an investment in a US business. It is valid for three months to five years, depending on the country of origin, but can be extended indefinitely.
Many property owners, renters, and investors said IPG Franchising owes them money, reports Gulf Coast News. One owner says he’s missing $23,000, while one renter claims a loss of $12,000 deposit.
Jane Sonkin told the outlet how she moved her family from Canada to Florida in 2022 to start their own business after investing in IPG Franchising. While initially the family received payments, now it’s been months since they received any payment.
Sonkin estimates they are out more than $200,000.
“It’s a huge amount of money. It’s our life savings. It’s money that was taken away from my children,” Sonkin said. “There’s no property anymore. There’s no communication. We are left with nothing.”
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Considering the recent scrutiny and lawsuits that followed, the question that comes to mind is what happened with overseas investors who acquired their E-2 Visas through IPG Franchising.
IPG Franchising files for Chapter 11 bankruptcy
IPG Franchising has filed for Chapter 11 bankruptcy, listing more than 80 creditors in the filing, not including some who have told the outlet they are also owed money.
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According to the filing, the company has less than $50,000 in estimated assets and between $1 million and $10 million in liabilities. Its website is also down.
It appears that the controversy runs even deeper as Gulf Coast News reveals the people behind IPG Franchising, Graham and Jamie Greene, managed more companies.
One of those companies, Island Attitude, which managed vacation rentals in the Manasota Key area, is said to owe money to property owners and those who paid to rent.
Previously, attorneys representing IPG Franchising defended the company, arguing its financial troubles stem from the pandemic and hurricanes.
What’s next for the vacation rental company?
Unlike Chapter 7 bankruptcy, which results in liquidation and final closure, Chapter 11 gives businesses more options. It enables them to reorganize its financial affairs in a process where a debtor can continue to operate their business while developing a plan to repay creditors.
Furthermore, when a business files for chapter 11 bankruptcy an automatic stay goes into effect under 11 U.S.C. § 362 which means that all ongoing lawsuits, collections, and other actions against the company are halted until the stay is lifted.
Given the lawsuits and the reported debts, it appears highly unlikely that IPG Franchising will recover from bankruptcy.
