No Phoenix from the flames for travel industry
2010-08-24
“There is no phoenix from the flames for the travel industry”: That's the stark warning from leading business expert Ian Oakley-Smith of PriceWaterHouseCoopers. Mr Oakley-Smith had this to say on the recent collapse of Kiss Flights: "There are no phoenix from the flames stories this year for the travel industry. Unlike other hospitality & leisure sectors, such as pubs, those tour operators who are going out of business cannot be resurrected. Pubs enjoy assets, and therefore bank borrowing and a controlled restructuring, allowing them to emerge from an insolvency as a trading business. Travel firms do not have this luxury and therefore when they run out of money, there are no options left.
"However, no one expected to see this money running out during the height of the holiday season. In an attempt to preserve the summer holiday consumers have become very savvy at sniffing out value for money deals - one of the reasons why budget travel firms such as Goldtrail, Sun4U and Kiss Flights have failed.
"But the postcard picture is more complex. Yes the industry is suffering from a lack of consumer finance as we reign in our credit card lifestyles but it is the budget end that is suffering. Budget businesses work off low margins and emergency reserves have been eroded during the downturn. This year's shock events, such as the lingering ash cloud, have forced them to price low to win business. This discounting has been enough to push some over the edge."
So, what can you do before you go on holiday? Ensure that all your travel insurance is up-to-date. And make sure that whoever you book through and with has all the necessary indemnities and insurances. I.E., ABTA, ATOL, etc. And book hotel and airport parking through www.aph.com to ensure that your holiday starts off with peace of mind.
