Travel Sector
Travel Sector
The fortunes of the UK’s travel sector have improved since the challenges of the pandemic and, according to The World Travel & Tourism Council latest assessment, tourism is predicted to contribute £252bn (11% of GDP) to the UK economy in 2023, finally beating the pre-pandemic high of £248bn in 2019. This is a significant uplift from the £237bn contribution in 2022.
The market for Tour Operators and Travel Agents
Across the sector, since the pandemic, there is positive news. Travel agents have benefited from rising sales prices, a healthy lates market and shorter call wait times with suppliers, leading to increased growth plans. ATOL has authorised 31.6m ATOL-protected packages for the year to September 2024, an increase of 20% year-on-year, which has helped assure customers through recent travel uncertainties. Airlines have seen profits soar, with both Ryanair and British Airways owner, IAG, announcing Q2 2023 profit increase of 400%. Yet, financial and operation challenges are still present.
Our travel sector report in October 2023 found that the average financial health rating, using data from the Company Watch database, was 38 out of a maximum of 100, compared to 37 in July 2021. While this is an improvement, this indicates that the entire sector is more vulnerable in financial terms than most others across the UK economy. The average for the whole economy is around 50 out of 100. The one positive statistic is that there has been a substantial improvement in the average health rating of our sample from a year ago, when the figure was only 33 out 100.
Business challenges being faced
- Ensuring supply chains are still intact and robust
- Recruiting suitable new staff
- Repaying loans
- Repairing balance sheet damage where asset values, such as goodwill and property have fallen
- Regaining working capital resilience from the after affects of the pandemic
- Negotiating with landlords on rent arrears and future rents
- Implementing risk measures for potential future disruption
- Managing IT and technology issues, such as cyber security and data protection
- Absorbing ongoing bio-security costs without damaging profitability
- Making sure businesses are both solvent now and viable for the future
- Producing meaningful and realistic financial forecasts to guide management and facilitate negotiations with stakeholders, such as lenders
How we can support your business
Partners and staff across the various Opus service lines have extensive experience and knowledge of the travel sector. There are many ways in which we can support tour operators and travel agents, their owners and their management.
Our strong international connections and experience are available to assist with overseas issues.
If you would like to hear more about how we can help your business to best manage its current challenges, please contact us at travel@opusllp.com or call us your local office to arrange a no obligation and confidential call with one of our Partners.
Funding Advice
We can assist you in seeking new funding opportunities to support your operations.
Financial Health Check
We can conduct a financial review of an organisation’s position and any areas of concern.
Mergers and Acquisitions
We can assist you in finding merging partners or exploring potential sales opportunities.
Cash Flow and Forecasting
We can advise you on any cash flow issues you may be experiencing and assist with debt management strategies and repayment terms.
Turnaround Planning
We can help you to enact positive, long-term change and improve the financial and operational running of your organisation.
Controlled Wind-down
If it is required, we will work with you to wind-down your organisation in a controlled way that supports your services and objectives.
We have experience of working in a number of areas within the technology sector, including:
- Fintech
- Commercial software
- Crypto-currency
- Online games/gaming
- Tech hardware
- Autonomous vehicles
- Vehicle batteries
- Artificial Intelligence (AI)
- Machine Learning
- Virtual Reality
- Blockchain
- Media & telecoms
If you would like to hear more about how we can help your business to best manage its current challenges, please contact us at tech@opusllp.com or call us at our nearest office to you.
Market Sector Report
The UK travel sector report – cautious optimism but finances need improvement
How is the UK travel industry responding after the pandemic and where can improvements be made?
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