More tour operators set to go
The Civil Aviation Authority and travel industry experts have warned more tour operators could fail following the collapse of Golden Sun Holidays, Airglobe Holidays and two more agents last week (see separate story).
Operators are vulnerable at this time of year because many have to pay to renew their ATOL bond and pay bills at a time when the cash flow from summer holidays has dried up.
The industry has had a wretched time this summer as overcapacity has led to widespread discounting and many operators are thought to be struggling to keep afloat.
A spokesman for the CAA said: “We are into the season for collapses. If it’s going to happen, it will be at this time of the year. However, we haven’t heard of any more yet.”
Federation of Tour Operators director Andy Cooper said: “It is a difficult market and I wouldn’t be surprised if more operators fell over, although I think all our members are in reasonable shape.”
A worrying development in recent years has been Mediterranean hotels extending credit to operators who often don’t pay their bills for months and, in some cases, years. Hoteliers are reluctant to pull the plug on struggling operators mid way through the season because they know they will not see any money if the company goes bankrupt. They therefore keep extending credit in the hope that the operator will be able to pull through and pay its bills.
“This is the way a lot of companies do business. When an operator tells a hotelier he can’t pay, the operator is in a difficult position. It’s a commercial relationship between two businesses, so we can’t really take a position on it,” said Cooper.
Anyone who has bought a holiday with Golden Sun or Airglobe should receive refunds within two months.
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