Since the Start of 2009, Over 50 Travel Companies Have Failed

Britain’s travel industry certainly isn’t enjoying the warmth of summer. Since the beginning of 2009, over fifty of the nation’s leading travel companies have been forced to close their doors due to weak revenue and dwindling profits, leaving thousands of holidayers stranded overseas and an even larger number out of pocket. The latest failure is Kiss Flights – a large flight and holiday sales group.

The failure of Britain’s travel industry could continue to spread, warns accountancy firm PwC. With many Britons angered by the failure of Kiss and other holiday providers, spending in the industry is likely to decrease alongside low consumer confidence. The problem is likely to be compounded due to limited savings and consumer spending, particularly on luxury items such as personal holidays.

Independent travellers, however, appear to be unsurprised by the failure of Britain’s most visible travel firms. The industry has seen a significant decrease in profits over the last few years, as more holidayers opt to book their flights independently and use price comparison websites to check for low-cost hotel rooms. One such firm, American Priceline, has reported record profits this year.

It’s a string of commercial failures that many believe could signal the end of the commission-driven travel industry. Travel agencies and other third-party booking companies have typically found value in offering direct fares and discounted travel – services that are now accessible to consumers online and through aggregator services. Analysts are predicting a further decline in travel agency bookings.

For the industry, it’s a problem that is unlikely to go away. Just as traditional publishing is fighting a losing battle against direct-access online products, the travel industry appears to be fighting against an audience that, in many ways, no longer needs it. For the next decade, low-cost fares and cheaper holidays may be found online, not in the window of the local travel agency.

Cornwall’s Tourism-Dependent Businesses Report Weak Demand

It’s not just international travel businesses that are feeling the spending squeeze – some of Britain’s most well-known domestic holiday destinations are seeing just a trickle of visitors, many of whom are opting for a shorter, less expensive holiday than usual. Cornwall is one of several regions under the financial weather, with tourism-dependent businesses reporting lower-than-usual revenue.

From hotels to the region’s restaurants, this year’s peak travel season has been fairly commercially underwhelming. While Britain’s economy is officially on the return to health, limited budgets and an all-round avoidance of needless spending have pushed many Britons to forego this year’s short holiday. Even fewer are opting to travel overseas, with a number of travel agents now bankrupt.

Prime Minister David Cameron has called for Britons to help their country’s ailing tourism industry, advising families to travel within the country rather than internationally. Stressing the lower cost of holidaying within the country and the various destinations within the UK, the government has hopes of increasing spending in the tourism industry, which is the nation’s third largest.

As part of a formal tourism recovery plan, the government will offer tax breaks and rebates to hotels and other businesses that cater to domestic tourists. Business rate rooms will be partially reimbursed by the government, encouraging hotels to lower prices and attract low-budget travellers. With many of Cornwall’s businesses struggling to hit targets, it appears that the incentives may be helpful.

But for those who depend on tourism for income, this year’s season is unlikely to hit its peak. From credit crunches to the Icelandic eruption, Britain’s tourism industry will have to survive through one of the worst peak seasons on record. Long-term plans focussing on China and other growing nations will likely make Britain an attractive destination, but they’re unlikely to occur this year.