Economic downturn ‘could lead to tour operator failures’

One in six tour operators could disappear if the current economic downturn hitting the UK worsens, a new study has predicted.

Industry analysts Plimsoll Publishing senior analyst David Pattison said already around 40% of companies are reporting declining sales while more than half of the UK’s top 1,000 operators are also seeing their margins fall.

With tighter lending procedures it is reckoned about half of these operators running low on ready cash could either fail or find themselves victim to aggressive take overs.

Pattison said: “We are reading every day how the credit market and the world of finance is being hit but nonetheless I was still surprised to see just how much the tour operators market is feeling the pressure.”

Federation of Tour Operators agreed that certain operators will go out of business because of the forthcoming economic downturn but questioned whether as many as one in six companies would be affected.

Association of Independent Tour Operators chairman Derek Moore argued that while times are tough, it is the smaller tour operators with the least commitments who are best placed to survive any downturn.

He added: “Smaller tour operators are much more flexible and are much more able to weather any downturns in the economy.”

The predictions come as two surveys revealed that people are still planning to go on holiday despite the credit crunch:

  • Nearly two-thirds of 600 respondents to a survey by are refusing to cancel or alter their holiday plans

  • found that 95% of 2000 British families it surveyed are still planning to go on holiday this year

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