The sudden closure of Misa Travel, once seen as a role model for its push into the online space, has shocked the travel industry.
It has raised questions about whether the firm tried to find new sources of revenue in the face of competition from global players, and expanded too fast.
The 23-year-old Misa Travel put up the shutters on Wednesday, a day after the Singapore Tourism Board (STB) revoked its travel agent licence for failing to "fulfil its obligations towards its customers" - leaving several clients in the lurch.
The Consumers Association of Singapore (Case) said it has received at least 17 complaints since the agency closed, with customers saying they were out of pocket by $18,000 for unfulfilled packages.
Neighbours of Misa Travel's office at Hong Lim Complex told The Straits Times that nothing had seemed amiss up until its closure.
Set up in 1994 by Mr Kenny Chew, Misa Travel's core business was in online travel ticketing services, through portals such as airfares. com.sg and cruises.com.sg. It was held up as a model for traditional agencies looking to migrate online.
In 2014, Mr Chew sold the business to private equity firm Zana Capital, which, along with Misa Travel, could not be reached yesterday.
Number of complaints received by Case since Misa Travel closed
The demise of yet another established travel agency follows the closures of coach company Five Stars Tours in 2014 and Asia-Euro Holidays in 2015.
An industry player told ST that after the takeover, Misa Travel's new management had tried to expand its portfolio. The travel agency, which primarily dealt with flight, hotel and cruise bookings, started getting involved in tour packages, corporate travel, and meetings, conferences and exhibitions travel.
"It tried to do more things, and so needed to hire more people, and the costs kept escalating," said the source.
There were other hints that not all was well. Last year, it had applied successfully for an STB fund which encourages tourism businesses to use technology or immersive tours to enhance the visitor experience.
But STB later terminated the agreement "as Misa Travel did not meet the agreed project timelines", said STB's director of travel agents and tourist guides Ong Ling Lee. No funding was provided to the company, she added.
Ngee Ann Polytechnic's senior tourism lecturer Michael Chiam noted that consumers can now buy tickets not only from online travel agents, but also from intermediaries such as Agoda and directly from airlines and hotels.
"It's a very competitive landscape. For a travel agent to survive, you have to be able to add value, such as organising tours using your expert knowledge of a particular location," he said. "But if you just offer run-of-the-mill services like booking tickets, you can't survive."
Case executive director Loy York Jiun advised affected consumers who had bought travel insurance to contact their insurance company immediately. Those who used their credit cards can contact their card-issuing bank.
A customer, Mr Lee Kim Hon, said Misa Travel has not replied to queries about his $3,000 purchase of 15 tickets to Hong Kong next week. The airline informed him his tickets have been voided. "Thankfully, I bought travel insurance," added the 38-year-old manager.
In the first five months of the year, Case received 195 complaints involving the travel industry.
•Additional reporting by Revathi Valluvar