Insolvencies of UK travel agents and tour operators rose 17% in the last year, from 59 to 69, according to international audit, tax, and advisory firm Mazars.
Travel sector insolvencies jumped from one to nine in July, suggesting a “deteriorating situation” for the industry, the company warned.
The travel sector, which employs 500,000 people, has struggled to get back on its feet due to the many obstacles against international travel as a result of the Covid-19 pandemic.
Mazars says many smaller travel firms have used up their cash reserves during lockdown.
Also those travel companies that deal with travellers for business or education have been hard hit.
The end of the ban on winding up petitions on October 1 means that travel agencies who owe more than £10,000 may face demands to pay up or be wound up, the firm said.
Mazars partner Rebecca Dacre said: “These figures suggest the crisis is far from over for the travel sector. Despite an increase in demand many travel agencies face a shortage of cash with which to operate and a shortage of options for credit.”
She added: “The insolvencies we’ve seen so far are likely to be the tip of the iceberg.
“In many cases, furlough support has been the only thing keeping travel businesses going. Now these firms will have to pay their whole wage bill and may find creditors knocking at the door.”