Foiled terrorist attacks add to travel trade’s woes

The foiled terrorist attacks on transatlantic flights could be the final nail in the coffin for the worst summer package-holiday trading conditions in 30 years.

Experts said the depressed state of the market, with more than one million trips left unsold, could lead to further travel company collapses following the failure of Tapestry Holidays.

White Hart Associates partner Chris Photi revealed he advised five ailing operators last week alone ­ despite being the middle of peak season.

Photi said: “I’ve been in this business for 30 years and it’s the worst I’ve known. What happened last week at Heathrow won’t help.”

Tapestry owner Nick Wrightman, whose business collapsed after 15 years, said: “When you can easily pick up 200 seats for a destination and pay less for them now than you’d have paid in May, you know the market’s bad.”

It is estimated the big four operators alone have up to 900,000 holidays unsold this summer.

A leaked Thomas Cook memo, sent days before the airport chaos, revealed the operator has more than 300,000 holidays left to sell with per-passenger margins down £20 on last year.

In the memo, chief executive Manny Fontenla-Novoa described the market as “terrible” and said the operator’s “performance still hangs in the Balance”.

“We are still way below where we need to be,” the memo added.

Advantage managing director John McEwan said: “This year it¹s been one thing after another with the World Cup, the good UK weather and now this foiled terrorist incident. There has to be more than one million holidays left unsold.”

Kinver Travel owner Sue Foxall added: “It’s frightening how much stock is available. It has a lot to do with us agents dynamically packaging.”

Cosmos Holidays overseas purchasing and operations director Hugh Morgan admitted the company has “slightly more” package holidays to sell than this time last year.

Worldchoice chairman Colin Heal feared further bargain basement prices could be on the cards with operators desperate to flog excess stock.

Chief executive On Holiday Group Steve Endacott said operators will be concerned about margins. Increased costs, predominantly fuel rises, mean holidays need to be “£25 per person more than last year just to stand still”, he said. “The lack of demand is abnormal. There are a lot of holidays to shift in the context of this weak demand. Customers are hesitating to book so it’s about how long the operator can hold prices for.”

Gold Medal said its sales were down “big numbers” on Thursday and Friday last week following the terror alert.

Managing director Terry Fisher said: “My chairman thinks I’ve got a book of excuses. We’ve just had the hottest July on record, the World Cup and now a terrorist threat. It¹s very challenging. We are all fighting for business.”