Many travel agents are ill-prepared for the impending recession and are facing possible failure, says the latest research.
The latest report into the UK travel agency market from industry analysts Plimsoll rates 122 of the UK’s leading 845 travel agents companies as being in financial danger.
Senior analyst David Pattison said: “There is no doubt in my mind that recessions catch bad businesses out.
“Those companies that have entered this period ill-prepared have placed themselves at a distinct disadvantage. Many have grown used to running their businesses on high risk business models, propped up largely on finance.
Of the 122 firms rated as facing financial danger 50 increased their debts last year, 91 saw profits fall last year and 78 are losing money.
The report claims many of these 122 “danger” businesses are fundamentally poor, aggressive or disruptive and are unhelpful to the market.
It makes an example of the airline industry, which it says is 12 to 18 months ahead of the travel agents market in the evolutionary cycle. It claims the failure of XL Leisure was a good thing for industry as it has freed up capacity.
Pattison added: “There are 507 terrific companies who can compete fiercely on price and are largely debt free while holding their margins. Most are operating at the height of productivity. These will be the one’s to watch in the next period.”
This is a community-moderated forum.
All post are the individual views of the respective commenter and are not the expressed views of Travel Weekly.
By posting your comments you agree to accept our Terms & Conditions.