Global recession hit UK tour operators hard

December 10, 2009 | Online Travel

The recession has hit the UK travel industry hard with more than half of the companies analysed in a new study report making less profit than they were a year before. On the other hand, there are still companies getting it right in spite of it all.

The recession has cost UK Tour Operators GBP2.1 billion in lost profit in the last year according to new research by market analysts Plimsoll.

David Pattison, senior analyst and author of the Plimsoll Analysis - Tour Operators, says “The recession has hit the sector hard with more than half of the companies analysed in our new report making less profit than they were a year before. The bill in lost profits stands at GBP2.1 billion.”

When pressed for a reason for this collapse in the bottom line of companies throughout the market, Pattison suggests, “With demand so subdued and the resultant competition, many companies are unable to charge the prices they need to make healthy profit margins. In the absence of pricing power many companies will have to make painful but necessary cutbacks in the next 12 month.”

However, the burden of lost profit is not being shared equally as Pattison explains, “570 companies have bore the brunt of the downturn. These companies have seen their profit margins decimated and in the absence of a big upturn in demand will have to cut their cloth accordingly. Watch out for further job losses and closures at these companies as they look to claw themselves back to profit next year. If they fail to act quickly they could find themselves running out of cash.”

On the other hand, there are still companies getting it right in spite of it all, “Amazingly, there are 233 companies that have maintained or increased their profit margins in the last year. All things considered that’s a pretty good achievement. While some of these companies made cut backs to match their lower sales expectations others have managed the Holy Grail - they have grown their business and increased their profit margins in a recession. Those companies prove that an efficient business selling the right product to the right market can still succeed in the current climate.”

The new Plimsoll Industry Analysis - Tour Operators gives an instant performance rating on the top 1000 companies in the market. Each company has been rated as Strong, Good, Mediocre, Caution or Danger according to their latest performance. A graphical and written analysis will tell you which companies are in trouble and who is getting it right.