The number of travel insolvencies has fallen in the second quarter of the year, offering hope for the industry during the peak summer season.
According to the latest report from PricewaterhouseCoopers (PwC), only 12 travel companies fell into administration from April to June. This represents a significant decrease on the first quarter of the year, when 27 companies succumbed to the recession.
However, PwC warned that shock-waves could be felt in the autumn, with a high number of UK consumers opting to give up their annual break.
A third of consumers polled by PwC have chosen a ‘staycation’ over a domestic or overseas trip this summer.
The survey of more than 2,000 people shows that consumers no longer rank holidays and short breaks as their top two spending priorities, as they did last year.
PwC director Guy Gillon said: “Despite the increase in domestic and inbound travel, tour operators and agents will be hit hard by those staying at home this summer. A year ago the perception was that consumers would do anything to preserve their hot holiday but as the grip of the recession tightens, the staycation is firmly on the agenda.”
Camping and caravan sites are benefitting from the squeeze on consumer spending and the weak pound, said PwC. The caravan holiday market is expected to show modest growth from 2009 to 2012.
However, Gillon said the market should not over estimate this trend. “Caravan holidays’ ability to appeal to those other than the converted is temporary as the pound remains weak, the euro strong, unemployment high and the sun supposedly out,” he said.