Plimsoll’s June analysis, which suggested 25% of companies were already running at a loss and nearly 200 were in immediate danger, annoyed many travel bosses, who told author and senior analyst David Pattison their sales were up.
In light of the industry response, Pattison has re-evaluated the 1,000 travel companies.
He said: ‘We are aware, following the release in June that our attitude had been rather ‘doom and gloom’. There was a backlash.
‘People’s feedback had been that sales were holding up well.’
Pattison said he was ‘disappointed’ at the response, but that he understood the reaction.
‘Companies can be quite defensive,’ he said.
The updated research shows that, while market growth is currently 3%, it has slowed from 5% last year.
A quarter (23%) of companies are currently selling at a loss, 45% are making less profit than last year, 34% of companies are in more debt than a year ago and 181 companies have a high risk of failure.
Pattison said that many bosses are focusing so much on sales that they are distracted from other areas of the business that require urgent attention.
‘A lot of companies are actually selling at a loss,’ he said.
See also:
7,000 travel jobs could go (15/07/08)
Agencies ‘selling less than two years ago’ (27/05/08)
Plimsoll: recession will claim one in seven agencies (25/04/08)