Brief respite in UK travel insolvencies

THERE was a marked drop in the number of UK travel companies falling into insolvency in the second quarter of the year, new figures have revealed, after the sector enjoyed a boost from the warm weather and the weakness of sterling.<br /><br />Business advisory firm PricewaterhouseCoopers said that just 12 UK travel firms succumbed to the recession between April and June, the lowest rate for a year, compared to 27 companies which failed in the first quarter of 2009.<br /><br />But it warned that the respite for travel firms would be shortlived, predicting that the rise in the number of people foregoing a summer holiday this year would cause shockwaves in the sector by the autumn.<br /><br />&ldquo;Despite the increase in domestic and inbound travel, tour operators and agents will be hit hard by those staying at home this summer,&rdquo; said Guy Gillon, a director at PwC. &ldquo;A year ago the perception was that consumers would do anything to preserve their hot holiday but as the grip of the recession tightens the staycation is now firmly on the agenda.&rdquo;<br /><br />He added that the swine flu pandemic and the precautions being taken to minimise its spread would have an adverse effect on inbound and outbound tourism, though it may increase demand for domestic holidays in the UK.