Holiday season

21% rise in UK travel sector insolvencies amid stop-start holiday season | Item

UK travel agent and tour operator bankruptcies rose 21% from 68 to 82 in the year ending November 30, 2021, international audit, tax and advisory firm Mazars has revealed. .

Additionally, in the most recent month, travel sector insolvencies fell from nine to 15 and global travel remained down 72% from pre-pandemic levels in 2021.

Mazars said the travel industry, which employs 500,000 people, hoped for a return to normal with the easing of restrictions last summer, but those hopes have been dashed by the emergence of the Omicron variant and continued restrictions. imposed on British tourists in countries such as Italy.

Travel agencies that deal with travelers for business or study have been particularly hard hit, as school trips and business trips have come to a halt during the pandemic.

Mazars said the end of the ban on liquidating petitions on October 1 means travel companies that owe their creditors more than £10,000 may have faced demands for payment or liquidation.

Many travel companies had hoped the limited cash reserves they had left with the easing of the lockdown would last until the peak holiday booking season from January to March, but Omicron meant a “moderate start” to the peak season .

Rebecca Dacre, partner at Mazars, said: “Many travel companies entered the low season in a precarious position and did not come out the other side. The intermittent nature of travel restrictions left damage persistent in the sector, with many consumers losing confidence and postponing bookings.

“As a result, operators across the industry have lacked cash and credit options. The adoption of UK holidays over overseas travel has had an additional negative impact.

She added: “The insolvencies we have seen so far may just be the start. Omicron’s restrictions will have blunted the recovery of the holiday sector and are likely to have further affected the results of travel companies. »

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