ââ¬ËœTicking time bombââ¬â¢ for struggling travel firms

 

The rate of travel company insolvencies was 13% higher in the first nine months of this year than the same period in 2008.

 

This is despite the collapse of XL last year.

 

The figure comes from accountants PrecewaterhouseCoopers, which warned of a potential ‘time bomb’ for struggling firms.

Director Ian Oakley-Smith, responding to Ireland’s biggest operator Budget Travel going to the wall, said: "Despite an increase in failures this year, the travel sector has experienced a relatively low rate of insolvency, compared to other hospitality and leisure sectors, so far.

 

"This is starting to change as we see big names such as Budget Travel fall foul of the recession.

"While the weak pound and domestic holidaymaker benefitted many travel companies, there is also an element of lenders not wishing to add to the company casualty list and propping up loss making businesses.

"Ski slopes will be desolate this season, as will early summer bookings, and inevitably this may mean a ticking time bomb for some struggling travel companies currently being valiantly assisted by financial stakeholders."


PwC travel & tourism insolvency statistics
Q4 2007 = 19
Q1 2008 = 11
Q2 2008 = 12
Q3 2008 = 24
Q4 2008 = 15
Q1 2009 = 27
Q2 2009 = 12
Q3 2009 = 14
Total = 134

 

by Phil Davies