Insolvencies on the rise for the travel industry as the weak pound and terrorism fears hit business
January 6, 2017
City AM travel reporter, Courtney Goldsmith writes that the UK travel sector is braced for thousands of insolvencies as the sector comes under increasing pressure from terrorism fears and rising costs. Currently there are just under 7,000 travel agents and tour operators in the UK and 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 becoming insolvent. around 160 of these are tour operators.
Concern for the travel industry follows the collapse of the small cruise line company, All Leisure Holidays, which has left hundreds of travellers stranded around the globe and led to the cancellation of more than 13,000 booked holidays.
Nick Hood, our business risk adviser said:
“Clearly, the travel industry is under severe stress from all sorts of different adverse factors. The fortunes of travel companies depend very heavily on where they’re based around the world and their scale, with smaller companies facing the highest risks.”