The collapses of Birmingham-based Sun4U and Kiss Flights are proof that travel companies cannot survive on low prices and razor-thin margins, according to agents.
Sources close to the Sun4U failure blamed it on the ash cloud crisis and the demise of Goldtrail Holidays. However, agents say its demise – along with the failures of Kiss Flights and Newcastle-based agency Monster Travel – is evidence that companies cannot succeed just by selling cheap holidays.
Speaking to Travel Weekly after the Kiss Flights collapse, The Co-operative Travel managing director Mike Greenacre claimed he saw the failure coming.
He said: “We said this would happen. It validates the fact that there is a price people have to pay to be able to go on holiday.”
“While it’s good to be highly competitive on price, you’ve got to have form to be able to do what you do, and identify your unique selling point. It can’t just be price.
“You’ve got to do a lot of research and get a lot of support in the bag before you launch an airline.”
Comments on travelweekly.co.uk also suggested that Sun4U had failed because of low margins.
One reader said: “‘Awesome holidays at really great prices’ – isn’t this the reason why these companies go under? The prices they sell holidays at have low margins? There seems to be a trend.”
Another reader said: “When I first started in travel the maximum discount a customer got was 5% or free insurance, but now it seems that isn’t good enough. It is the travel industry’s own fault for going down the discount route and cheapening the industry.”
Meanwhile, other agencies have moved to recruit Sun4U’s 92 call centre and homeworker staff. Bookable Holidays and Holidays Please have approached them.
Bluesea Holidays, a member of the Hays Independence Group, is also looking for homeworkers.