Data published this week shows the travel industry is under increased pressure, with thousands of potential insolvencies in the pipeline for travel businesses.
The threat of terrorism is a growing concern and this, as well as rising costs, is deterring travellers and impacting the industry.
Of the 7,000 travel agents and tour operators in the UK, 26 per cent have been given a "warning rating" by Company Watch, indicating a real risk of insolvency.
Last year, our insolvency specialists BM Advisory oversaw the liquidation of Jewel in the Crown Holidays Limited, a specialist tour operator based in Crawley, West Sussex. The business had been trading for 29 years but incurred a significant reduction in income as a result of the difficult business environment brought on by the ongoing political disruption in Turkey which has severely affected its tourism sector.
And just this week the small cruise company All Leisure Holidays said it would stop trading with immediate effect, impacted by the weak sterling and political instability across its key destinations, Tunisia and Libya, the Mediterranean and the Black Sea.
Commenting on the industry performance in 2016, Mark Tanzer, Chief Executive of travel association ABTA, says: "The past year has been both eventful and challenging from a travel industry perspective. The threat of terrorism around the world has become more widespread with many countries, including here in the UK, on a heightened state of security alert. We have also experienced an unusually eventful and turbulent time in UK politics … which has had an immediate impact on the value of the pound."
On a more positive note, figures from ABTA Holiday Habits Report 2016 show a surge in the number of people taking a domestic holiday in the UK, a 71 per cent increase in 2017, up from 64 per cent on the previous year.
Mr Tanzer added however that “uncertainties still lie ahead for the UK economy around the Government’s Brexit negotiations.”
Beavis Morgan – business experts to the travel industry
At Beavis Morgan, we have extensive experience of working with clients in the travel and tourism sectors and our professionals are acknowledged experts in issues affecting organisations operating in this area.
We work with our clients to put processes in place which make it easier to run your business and to maintain effective management of your company’s working capital. We also assist with management accounts, enabling better control of your financial situation and awareness of the business in real time, enhancing planning for the peaks and troughs.
In turn, If you have any concerns the financial position of your business, speak to one of our experts at BM Advisory – the sooner advice is taken, the greater the range of options that could be available to you to resolve any issues and get back on the right track.