16 July 2008

Tour operators to shed hundreds of jobs, says industry analysts

UK tour operators could be forced to shed more than 8000 jobs over the next 12 months with a single operator in danger of shedding 898 staff, according to industry analysts Plimsoll Publishing.

In an analysis of the travel industry which included 1000 operators, the company says that as many as three quarters of them would have to reduce staff numbers in order to survive the current economic crisis. It highlights the fact that one operator is in danger of mass job losses but refuses to name the company.

The report adds that it estimates that a quarter of operators it looked at were running at a loss and that companies need to aim for at least Ã&#pound;286,000 sales per employee in order to remain competitive.

Plimsoll says there are 210 operators that need to consolidate immediately as they are losing money, in too-large debt and are exposed to their lenders while 307 further operators need to tweak their business, making Ã¢â¬Åâœsmall but simple changesÃ¢â¬~.

Plimsoll senior analyst David Pattison said: Ã¢â¬ÅâœThe 210 companies we have identified as in danger need to act now if they are to survive. It very important they review their entire business cost base and take action now to significantly reduce their outgoings. Whilst job losses are undoubtedly bad news for any company, such decisive action may be called for to guarantee the ultimate survival of the business- even if this means the business is 30 or 50% smaller than it was.Ã¢â¬~

By Dinah Hatch

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Your Comments (7)

Offshoring prejudices customer service

Companies that move their back office operations to India should face a tax as it is taking jobs away from the UK and not taking into consideration customer service for the British client. The USA has already been heavily hit by such operations and the issue of a punitive tax are being mooted considering the dire strait of employment and the economy over there. We will soon be in that situation if not worse !

By Chris George, Monday, July 28, 2008
be realistic

We need to be realistic.If,customer service would have been the case than companies like American express,GE capital ,Aviva,Barclays bank etc would have shut their operations.Everyone has to move with time.Being patriotic is good but we have to keep these emotions at bay and be realistic how we could grow and consolidate in a better way....

By mandeep singh, Monday, July 28, 2008
Waffle

Do you honestly mean to tell us that directors of UK travel companies haven't happened to look at their trading performance or balance sheets lately? How patronising. The day that travel reservations move to India is the day that customers go "bye bye". So on that note - its bye bye from me, as like many UK holiday makers, I'm getting my shorts on and staying in blighty.

By Gary Phillips, Wednesday, July 23, 2008
Best thing to do

Recession is everywhere in each and every country.The best thing for these tour operators will be to analyse the situation and shift their back end operations to India for better future.

By mandeep singh, Friday, July 18, 2008
All about the people

So why then did FTO members get rid of so many staff if they are one of their key assets. And because they have got rid of key assets previously and not reduced other costs as Andy suggests why should it be any different this time? By the way Andy are you not yet a part of ABTA? David Speakman Chairman Travel Counsellors Group

By David Speakman, Thursday, July 17, 2008
Tour operators in trouble

210 companies need to consolidate immediately? Not 209 or 211?

By David Burdon, Thursday, July 17, 2008
Questionable Conclusions?

I don't think that anyone would deny that this year, and more likely next year, will be difficult for the industry, and that as a result, tour operators will need to control their costs. However, to suggest, as Plimsoll appear to, that making staff cuts are the only means of making cost reductions seems both naive and scaremongering. There have already been huge cuts in staffing levels across many operators, and it may well be that if operators need to save costs, that there are other, more effective means of doing so. It doesn't help anyone when we read articles claiming that the only way that businesses will survive is to get rid of one of their key assets, their staff.

By Andy Cooper, Thursday, July 17, 2008