Several travel companies in United Kingdom are going broke as greater number of people in the UK chose to stay at home during the summer. Global events such as the Olympics have also played their part in affecting business at travel firms.
It was reported by accountants Wilkins Kennedy that in the starting 12 months that ended in September, as many as 86 travel companies and tour operators turned bankrupt. In 2011, the number of UK travel companies that reported bankruptcy was 40.
As the euro zone continues to struggle with recession, businesses in different European countries are struggling.
According to a partner at Wilkins Kennedy, Anthony Cork, in summer 2012, most of the UK had the “feel good factor” but that has translated into weak growth and low business for travel agencies and tour operators, leaving them with little to celebrate.
It is not only the recession that has affected business at travel firms but the overall conditions in different countries as well. For instance, Egypt is one of the most popular tourist destinations and a lot of people from the United Kingdom visit Egypt during the summer season. However, with the uncertainty going on in Egypt at the political and economic front, people are hesitant to visit the country.
The same applies to another popular tourist destination, Greece. Greece’s conditions are also currently not up to par for people to visit the country and these factors are also affecting the business at travel agencies.
According to Anthony Cork, travel firms need an exceptional year from here on to help them avoid receding deeper into bankruptcy or avoid bankruptcy (for those who haven’t declared bankruptcy yet).
Some of the most popular travel firms in the United Kingdom have gone into administration, one of which includes: Enjoy Holidays. Enjoy Holidays, with 5 branches across the country, was into administration during the month of August, as it owed £1.2m to its creditors.
Additionally, Shenoy & Co, which trades as Reliable Holidays and Economy Travels online, also went into administration, while Astonbury that trades as Sky Jet, declared bankruptcy in 2011, after it demanded £23,000 from its passengers (on flight) if they wanted to continue their travel.
Summer is the season when business at travel firms flourishes but this hasn’t been the case for UK travel firms this year and there is no reason to expect any big increase in business activity in the coming months either.