Published on Tuesday, July 26, 2011
The number of travel companies facing "critical" financial problems rose 31% in the last quarter, more than twice as much as the average across all industries in the UK.
For the hotels and accommodation, the rise was even sharper at 47%.
The shocking figures were released in a survey by insolvency specialist Begbies Traynor which found that across all sectors, there was a 12% increase in businesses facing â€˜criticalâ€™ financial problems when compared to last quarter.
The total number of UK firms experiencing critical difficulties rose from 4,620 in the first quarter to 5,179 in the second.
Ric Traynor, executive chairman of Begbies Traynor Group, said: â€œThe figures for Q2 2011 show the number of UK companies facing â€˜criticalâ€™ problems has increased since last quarter. The fall in â€˜significantâ€™ problems is an apparent glimmer of good news, but we believe this is indicative of weaker businesses actively moving from â€˜significantâ€™ to â€˜criticalâ€™ financial problems â€“ and ultimately to insolvency, as well as seasonal factors which typically impact on the Q1 figures.
â€œIn addition HMRC is taking a more robust stance. As the level of support from the Revenue is gradually decreased, it is increasingly evident that businesses using the scheme are now struggling to cope with current trading conditions.â€
by Bev Fearis
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The recent insolvency of Low Cost Travel Group, one of the large players in the travel industry had a big impact on the travelers, hotels and all related players from both wholesale & retail arms. There were about 27,000 people on a holiday who had booked through the company comprised of a €200 million wholesale arm and €500 million OTA / retail arm.