Why so many travel firms going bust?

movilogo

Any idea? With economy improving they would have been growing instead!

Really2

movilogo wrote: »

Any idea? With economy improving they would have been growing instead!

Went through a bust, people are saving more perhaps making up for lost income.
I presume a holiday abroad is fairly low on the list when you are correcting the ship.

Like you said the economy is improving but we are a long way off a boom and the security it brings yet.

Don't forget booking are made up to a year in advance (well the ones that make the most money), so I dare say not many booked up mid recession.

Generali

Falling consumer spending coupled with rising fuel costs if you want the macro picture. Also, the UK is a tough country for a medium-sized company to do business.

lord_blackadder

Not charging enough for your holiday perhaps

movilogo

UK is a tough country for a medium-sized company to do business

Why is so?

purch

The fact that so many thousands of people are left stranded abroad, or are unable to take their booked and paid for holiday means you can't blame it all on the "recession"

They must have got their sums badly wrong, especially regarding their cashflows to have got themselves into this position.

You could understand it if they went out of business due to lack of customers, but this clearly isn't the case.

Generali

movilogo wrote: »

Why is so?

Because Governments in the UK, and to be fair most large economies, tend to take a Corporatist approach to economy.

When the Government introduces rules and regulations and exemptions and complications to doing business then they are careful to exclude very small companies.

Very large companies can take the cost because one compliance officer added to 10,000 staff is next to nothing.

Medium sized companies have to face the compliance costs of crackpot Government schemes (pretty much all of which are doubtless well meant) and these will be a far high proportion of costs than for a big company.

Why do you think it's only the massive supermarket chains that get to open new out of town stores for example? There are thousands of entrepreneurial people that own successful retail outlets that would love the chance to compete with Tesco and Sainsbury. They can't afford the legal costs of fighting against the planners to be able to do it.

The same can be said of hundreds of industries in the UK. Try opening a bank (one new banking licence has been issued since the C19th I think) or starting up a car company or a drugs company or a cigarette company or a mobile phone network.

The_White_Horse

movilogo wrote: »

Why is so?

coz they tax so highly to keep our graping scroungers in stella and other luxuries.

wymondham

movilogo wrote: »

Any idea? With economy improving they would have been growing instead!

Travel companies predict a year in advance and have obviously got their sums wrong!

When things are tight (or your told they are tight!) then the first thing that suffers is the holiday in my experience....

Lots of people holidaying in the UK and not travelling too far a field?

I have to admit that the constant problems with Air Traffic Controllers and airlines etc would make me seriously question if I wanted to travel this way even if I had the money!

Really2

purch wrote: »

The fact that so many thousands of people are left stranded abroad, or are unable to take their booked and paid for holiday means you can't blame it all on the "recession"

They must have got their sums badly wrong, especially regarding their cashflows to have got themselves into this position.

You could understand it if they went out of business due to lack of customers, but this clearly isn't the case.

I agree, (in part )

I may be wrong here but do the travel companies not have to pre-book spaces to get deals, they then have to sell the deals.

I may be wrong but I thought some of the bigger ones had to do that, so yes people are going but if they are left with spaces in pre booked places that they have to pay for you can see how it can go wrong so quickly.

I also presume that is why it is happening now, the invoice rolling in for the pre-booked spaces. (also fuel increases etc)

michaels

The_White_Horse wrote: »

coz they tax so highly to keep our graping scroungers in stella and other luxuries.

Whilst I agree that Stella isn't a necessity I would be hard pressed to describe it as luxury...