ABTA chief executive Ian Reynolds has predicted a spate of collapses among independent agents this autumn following a dire summer for the trade.
Agents advertising on Teletext are thought to be most vulnerable because they specialise in the late-bookings market, which has been weak this year.
In addition, agents relying on sales to the eastern Mediterranean, which has had a terrible summer following the Kosovo crisis and the earthquake in Turkey, are struggling.
The independents’ plight has been compounded by the multiples’ aggressive discounting to mop-up late bookings.
Until recently, it has been the problems of the major companies which have been highlighted, with market leader Thomson issuing a profits warning and parting company with chief executive Paul Brett (Travel Weekly July 26).
But Reynolds has been alerted to the plight of the independents by four failures during the August peak-season, including Florin Travel which is expected to cost the association around £100,000. “We’ve had a pretty stable time with only 20 to 25 failures in the past couple of years,” said Reynolds.
“But I think we are in for a shock and we’ll see some more.
“When you see four failures during peak season it is worrying because there is a pattern and you expect things to get worse in September and October.
“It’s not to do with independents being bad agents, but rather a patchy market taking its toll,” he said.
A spokeswoman for Newcastle-based Teletext agent Lincoln Travel said trading was fine, but declined to comment on the state of the market.
Advantage managing director Ron Muir said none of his members had reported any problems. Meanwhile, ARTAC general manager Chris Fife said he did not envisage its members having any difficulties.
“There has been less late availability during August, but what has been available has been at a higher price,” said Fife.
“We have a wider product range than the multiples and have been able to ride out problems. The Teletext boys in particular have had a hard time, but we are lucky we do not have any agents relying purely on Teletext.”
ABTA has reserves of £8m, plus another £5m in its captive insurance policy, which should be enough to cope easily with any failures.
The association has enjoyed a relatively stable period since 1995, when there were more than 100 agency failures. But 1991 was the worst year in recent history when the collapse of Exchange Travel contributed to a £14m call on the association’s reserves.
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