Going into administration is a difficult time for any company and its creditors, but when a travel company does so, it is especially difficult. This is because holiday makers can be left stranded overseas, whilst those who have pre-paid suddenly no longer have a holiday to go on.
Appointing a licensed insolvency practitioner with experience of the travel sector as the administrator, one who can act quickly and decisively, is in the best interests of all parties. This article features a testimonial from the client whom we helped guide through a very stressful time. It concludes with a warning that more travel industry insolvencies are expected in 2017 and beyond.
What the Client Said About Our Work as Administrators
“From the moment I contacted Simon Parker and Antony Batty, their professional advice and guidance was invaluable and certainly helped to guide us through an extremely difficult, worrying and stressful time.
They were understood what a difficult time this was for everyone involved and treated all our staff with respect and empathy, during the administration. Their knowledge of the travel industry and the complications that are particular to the industry is excellent, and the importance of this must not be underestimated.
I would highly recommend Simon Parker and Antony Batty to any business faced with the difficulties involved in insolvency.”
(Kevin Riley – Director)
The Circumstances of this Company in Administration
When the company went into administration, which included Diamond Holidays, Diamond Rail Holidays and the River Cruise Line, there were 7,000 forward bookings – affecting c.16,000 passengers – that were cancelled. In addition, the company itself employed 52 people, of whom 26 were based overseas.
Using our knowledge and experience of travel industry insolvencies, which includes good relationships with the regulators including the CAA, ABTA and IATA as well as the merchant acquirers, such as Barclaycard and Streamline, we acted quickly to guide the company through the necessary procedures to help those customers who were stranded abroad, and those whose holiday was now cancelled and needed to re-book and lodge a compensation claim.
More Travel Industry Insolvencies are Anticipated in 2017
It is generally considered that the travel industry is in for a difficult time during 2017 and beyond. This is a result of several factors, including:
- The weakness of Sterling following the Brexit referendum
- Fear of increasing inflation
- Concern over terrorism at some destinations
It is for these reasons that of the 7,000 travel agents and tour operators in the UK, c.1,800 have been given a ‘warning rating’ from Company Watch, a database which measures the risk of insolvency. Of these, 450 were considered as being at a ‘real risk’ of going insolvent. Sadly, we expect to see the phrase ‘travel company in administration’ in the media more frequently than usual this year.
