The 2009 edition of the Plimsoll Analysis – Travel Agents looks at the leading 845 agents in the UK. It values each company, assesses its strengths and weaknesses, and rates them on their attractiveness as an acquisition.
Of the 122 in danger, 50 increased their debts last year and are now carrying almost twice the level of debt recommended by Plimsoll, 91 saw profits fall and 78 are losing money.
Meanwhile, 81 of them – described by Plimsoll senior analyst David Pattison, as ‘well established’ – are ‘failing to adapt to the modern travel agents market and are now falling behind the rest of the market as a result’.
Pattison said: ‘It is clear that many of these 122 ‘danger’ businesses are fundamentally poor, aggressive or disruptive and are unhelpful to the market.
‘With newly prudent banking systems in place, raising quick finance will not paper over the cracks as it once did.’
He added: ‘Our analysis is clear. Not all of these 122 businesses will survive.
‘Of those who do, very few will be in their current shape and many will be in the hands of new owners.
‘This further supports the argument that despite the obvious tragedy of job losses, livelihoods lost and the pain of a business in decline this period is inevitable and can only be good news for the market in the long run.’
See also:
Backlash puts Plimsoll on the defensive (13/08/09)
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)