The merger of Thomas Cook and Cooperative Travel is a further sign that there are too many companies chasing too little market.
This move will allow the new group to dominate a sector of the economy which analysts predict could be heading for another difficult year in 2011. Their ability to streamline operations, reduce cost and expand their collective reach on the High Street will see them dominate in a market where profit margins are still barely above zero and growth is uncertain. Sadly, there will be job cuts but on the whole its a positive move.
So how will this affect the rest of the market? There are still some excellent independent businesses in this sector. Companies like Southall Travel are a great example of companies that have performed well in recent years. However, if predictions are correct and demand remains subdued into next year how many of industry's weaker agents will be survive?
178 agents are already struggling and another bad year could see a bigger wave of consolidation. Who will be buying and who will be desperately selling?
Showing posts with label uk travel industry. Show all posts
Showing posts with label uk travel industry. Show all posts
Friday, 8 October 2010
Monday, 20 September 2010
177 UK Tour Operators named as Zombies by Plimsoll
177 UK Tour Operators industry are now classified as “Zombie” businesses. These companies have seen their performance deteriorate to such as extent that they now exist merely to pay off their debts and survive.
They are posting growing losses and, despite the obvious freeze in the credit markets, increasing their debts. These Zombie businesses have debts at an average of 70% of turnover – they exist to service their out of control liabilities. Many are also using their suppliers to finance their growing losses, taking twice as long as to pay their bills as the industry average of 26 days.
What's worse is they are falling behind the rest and their productivity is well below the industry average. It’s hard for them to compete as their cost base is just too high. As a result, investment plans have been mothballed meaning their aging assets are further restricting their ability to remain competitive.
So can these Zombies be saved? The first thing they need to do is sort out their immediate finances. They have to convince their banks and suppliers to keep supporting them or not pull the plug. If they can pull that off then the hard work really starts. They urgently need to stem their losses and control costs. The longer it takes them to address these issues, the harder and less likely it is they will ever fix them.
However, there are attractive takeover targets among the Zombies - canny investors could pick up a bargain. Some of these companies, stuck in a zombie state because of their balance sheet, have lots of potential for new owners to turn it around. We picked 109 companies that we feel have the most potential.
Those unable to attract new buyers may have simply had their day. A combination of aging assets, rising losses and increasing debts mean they are unlikely to attract a suitor before the receivers are called. They will be forced back into negotiations with their lenders to buy more time but their future doesn’t look good.
Click here to see how the new Plimsoll Analysis - Tour Operators will give you this key industry findings instantly
It will tell you instantly which companies are prospering in the post recession market place, those taking a big gamble and those in trouble. It gives an instant performance rating on 1000 companies and highlights those ripe for acquisition.
They are posting growing losses and, despite the obvious freeze in the credit markets, increasing their debts. These Zombie businesses have debts at an average of 70% of turnover – they exist to service their out of control liabilities. Many are also using their suppliers to finance their growing losses, taking twice as long as to pay their bills as the industry average of 26 days.
What's worse is they are falling behind the rest and their productivity is well below the industry average. It’s hard for them to compete as their cost base is just too high. As a result, investment plans have been mothballed meaning their aging assets are further restricting their ability to remain competitive.
So can these Zombies be saved? The first thing they need to do is sort out their immediate finances. They have to convince their banks and suppliers to keep supporting them or not pull the plug. If they can pull that off then the hard work really starts. They urgently need to stem their losses and control costs. The longer it takes them to address these issues, the harder and less likely it is they will ever fix them.
However, there are attractive takeover targets among the Zombies - canny investors could pick up a bargain. Some of these companies, stuck in a zombie state because of their balance sheet, have lots of potential for new owners to turn it around. We picked 109 companies that we feel have the most potential.
Those unable to attract new buyers may have simply had their day. A combination of aging assets, rising losses and increasing debts mean they are unlikely to attract a suitor before the receivers are called. They will be forced back into negotiations with their lenders to buy more time but their future doesn’t look good.
Click here to see how the new Plimsoll Analysis - Tour Operators will give you this key industry findings instantly
It will tell you instantly which companies are prospering in the post recession market place, those taking a big gamble and those in trouble. It gives an instant performance rating on 1000 companies and highlights those ripe for acquisition.
Wednesday, 8 September 2010
Travel market - Airport hotels see guest numbers soar as travellers see benefit
Airport hotels used to carry the connotation of being a last resort after a cancelled flight or for convenience during a quick business trip, but it seems this is all changing.
Recent surveys have shown that travellers are becoming more likely to choose an airport hotel than the previously more popular city-centred option. As people try to keep an eye on their pennies, the option of cheaper airport hotels has proven to be more attractive to those not wanting to overspend following the economic crisis.
As more airport hotels offer useful amenities to their customers such as free Wi-Fi (an important factor when considering accommodation, business or pleasure), and extras like parking included in the price, budget-conscious travellers have seen convenient advantages in choosing an airport hotel.
Compared to the normal city-based hotel that visitors tend to opt for when choosing where to sleep, choosing an airport hotel can mean an average saving of 42%* for the traveller as well as the added benefits of extras included in the price.
*www.hotelier.com
Recent surveys have shown that travellers are becoming more likely to choose an airport hotel than the previously more popular city-centred option. As people try to keep an eye on their pennies, the option of cheaper airport hotels has proven to be more attractive to those not wanting to overspend following the economic crisis.
As more airport hotels offer useful amenities to their customers such as free Wi-Fi (an important factor when considering accommodation, business or pleasure), and extras like parking included in the price, budget-conscious travellers have seen convenient advantages in choosing an airport hotel.
Compared to the normal city-based hotel that visitors tend to opt for when choosing where to sleep, choosing an airport hotel can mean an average saving of 42%* for the traveller as well as the added benefits of extras included in the price.
*www.hotelier.com
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