Abta has hit back at claims of a heightened risk of failure in the travel industry, dismissing as “ludicrous” a warning that thousands of travel companies are poised to go out of business.
Insolvency firm Begbies Traynor published a report at the end of last week claiming more than 2,600 travel industry businesses in the UK are “experiencing significant distress”.
Abta chief executive Mark Tanzer described the report as having “very little basis in reality”.
Begbies Traynor said 26% of UK travel agents and tour operators had attracted an insolvency “warning rating” in the final quarter of 2016, and suggested the number of firms in distress was 4% up on a year ago and 10% up on the previous quarter.
A report in London’s free business newspaper City AM on Friday quoted the figures along with a statement from Opus Restructuring business risk advisor Nick Hood saying: “The travel industry is under severe stress from all sorts of different adverse factors.”
However, Begbies Traynor claimed similarly high risks of insolvency among travel firms a year ago only for the sector to enjoy a near record year for outbound holidays.
At the same time, the number of travel company failures remained at a near record low in 2016.
Tanzer said the insolvency claims were “far-fetched and highly misleading”, but he warned the report “runs the risk of damaging customer and business confidence”.
He pointed out that, despite All Leisure Holidays ceasing trading last week, fewer than 20 Abta members have gone out of business in the last three years.
Begbies Traynor based its figures on its award of a “red flag” to companies it considers have a 33% chance of ceasing trading within three years.
In November, it estimated the increased risk of failure over the past year among UK retailers outside travel as double that among travel agents and tour operators.
See also – Comment: Reports of travel’s death are greatly exaggerated – Abta chief, Mark Tanzer