Hundreds of travel firms at ‘real risk’ of insolvency says Travel Weekly
January 6, 2017
Travel Weekly has reported on the financial crisis threatening the UK travel industry. This follows the recent collapse of the cruise company, All Leisure Group. Geopolitical risks, terrorism threats and the fall in the value of sterling are all likely to impact on bookings, as will the effect of inflation on travellers’ disposable income. Companies with too great a focus on troubled locations such as Turkey, North Africa and the Middle East will be especially at risk. Travel to some previously popular parts of Northern Europe, such as Germany and France may even be adversely affected.
Currently, there are just under 7,000 travel agents and tour operators in the UK. Out of these 1,800, or 26%, have attracted the “warning rating” of Company Watch, a database that measures a company’s risk of insolvency.
Out of the 1,800 travel companies deemed at risk by Company Watch, about 450 are at “real risk” of going insolvent, said Nick Hood, business risk adviser for Opus Restructuring. Around 160 of these are tour operators.
“Clearly, the travel industry is under severe stress from all sorts of different adverse factors,” Hood said.
He added that the fortunes of travel companies depend very heavily on where they are based around the world and their scale, with smaller companies facing higher risks.