UK travel bankruptcies on the rise as Omicron and staycations scupper sector’s recovery
The UK’s travel sector is still suffering from the impacts of Covid, according to new figures from accountancy company Mazars, which show that travel sector insolvencies are on the rise.
In January, 15 travel companies went into insolvency, up from nine in December, Mazars’ figures show.
The recent rise in the number of insolvencies comes as the spread of the Omicron variant has scuppered the travel sector’s hopes of a rebound in 2022.
Rebecca Dacre, Partner at Mazars said: “Many travel companies went into the off-season in a precarious position and have not come out the other side.”
The recent rise in travel sector bankruptcies also sits in line with an uptick in the number of travel sector insolvencies over the previous year.
Bankruptcies in the travel sector increased by 21 per cent, between 2020 and 2021, from a total of 68 in 2020 to 82 the following year.
The figures come as restrictions on global travel, aimed at stemming the spread of Covid-19, have decimated the travel and tourism industry.
Last year, the global travel sector was continuing to operate at reduced capacity, as travel remained at levels 72 per cent lower than before the start of the pandemic.
“The on-off nature of travel restrictions has left lingering damage in the sector with many consumers having lost confidence and put off bookings,” Dacre said.
“Consequently, operators across the industry have been running out of options for cashflow and for credit.”
“The adoption of UK holidays instead of foreign travel has had a further negative impact.”