Third of UK travel agents could go out of business by 2021, says new report
'In quite a lot of cases, the total assets of a particular company will be less than the cost of some of the holidays their clients book with them,' said insolvency practioner Nick Hood
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Your support makes all the difference.Hundreds of UK travel agents and tour operators could go out of business within three years, according to research commissioned by Radio 4’s consumer programme, You and Yours.
The BBC programme asked the insolvency firm Opus Restructuring to analyse Company Watch data on the finances of almost 4,000 travel firms.
The researchers calculated that one in three of the 2,584 travel agents analysed and 29 per cent of the 1,325 tour operators are in danger of folding within three years.
Nick Hood, insolvency practitioner with Opus Restructuring, said: “There’s been a sharp deterioration in the past year for travel agents.
“Around 15 per cent of all the companies are ‘zombies’, i e they have balance sheets that are negative by £5,000 or more.
“Twenty-five per cent of travel agents and 21 per cent of tour operators have total assets of only £25,000 or less, which indicates exactly how gentle a puff of wind it would take to blow them away.
“In quite a lot of cases, the total assets of a particular company will be less than the cost of some of the holidays their clients book with them.”
The conclusion: “This is an industry with a clear lack of financial substance.”
But Abta, the trade association representing travel agents and tour operators, rejected the findings.
A spokesperson for the organisation said: “We seriously question the reliability of this analysis and do not believe that it reflects the status of the industry, nor can it provide any accurate indication about what might happen to travel businesses in the future.
“Travel is a very resilient industry and the number of insolvencies in recent years is historically low.
“Abta has around 1,200 members yet there have been just 13 insolvencies in the last three years – equivalent to just one per cent of our membership.”
In October 2017, around half-a-million holidaymakers were affected by the failure of Monarch. An airlift was organised to bring more than 100,000 stranded passengers home.
The You and Yours reporter, Samantha Fenwick, said: “Any UK consumer dealing with this industry needs to check out the company’s finances if they can and they should always pay by credit card.”
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