Atol/abta

[TheCountOfNowhere]

Another tour operator goes bust...10's of thousands stranded.

Someone pays for them to come home.

Where does the money come from ?

If one of the big companies go will this have the knock on effect of killing ATOL/ABTA ?

Is it conceivable we are seeing the end to the cheap package tours and chavs abroad ?

If tourism is down this must be affecting spainish/greek/protugues resorts considerably.

[Bloo Loo]

You contribute with every ticket, tour and holiday you purchase....who else could possibly pay?

[scottbeard]

Is it conceivable we are seeing the end to the cheap package tours and chavs abroad ?

Yes, but only because rising oil prices will in a few years make air travel prohibitively expensive. Back to Bournemouth it will be.

[monks]

Another tour operator goes bust...10's of thousands stranded.

Someone pays for them to come home.

Where does the money come from ?

If one of the big companies go will this have the knock on effect of killing ATOL/ABTA ?

Is it conceivable we are seeing the end to the cheap package tours and chavs abroad ?

If tourism is down this must be affecting spainish/greek/protugues resorts considerably.

Not sure these failures are due to tourism substantially dropping. More like too many travel companies competing for the existing trade.

These aren't news stories until we see Thomas Cook / Thomson etc go under

[Cogs]

Tour operators are always going bust. Its just how the industry functions, I'm not convinced there is some sort of crisis, its like this in the 'good' years as well. Its mostly a cashflow + skimming business these days, people get it wrong, fold, and start again. The reasons for these crunches are stuff to do with their internal control of the money flow, its not really about their absolute level of sales or even their profitability as such. Think about it, in principle they shouldn't be able to go bust, they are just acting as agents effectively. Someone bought a block too many and they couldn't shift it etc etc.

Edited August 18, 2010 by Cogs

[Bloo Loo]

Tour operators are always going bust. Its just how the industry functions, I'm not convinced there is some sort of crisis, its like this in the 'good' years as well. Its mostly a cashflow + skimming business these days, people get it wrong, fold, and start again. The reasons for these crunches are stuff to do with their internal control of the money flow, its not really about their absolute level of sales or even their profitability as such. Think about it, in principle they shouldn't be able to go bust, they are just acting as agents effectively. Someone bought a block too many and they couldn't shift it etc etc.

course they can go bust. they have costs like premises, web site, advertising, phone, insurance, staff, bonding, loans, repairs and renewals, IT.

[TheCountOfNowhere]

Seems to be more than avergae numbers of tour operators going bust.

This must be down to drops in the holidays being taken.

It the costs of flights/hotels etc were rising they'd put that cost on the holidays.

It looks to me like they have over estimated and people just cant afford to go now.

How much of a crash in tourism would it take for ATOL/ABTA to crash ( and be bailed out no doubt ).

[Cogs]

course they can go bust. they have costs like premises, web site, advertising, phone, insurance, staff, bonding, loans, repairs and renewals, IT.

None of it a massive deal, the IT infrastructure is largely provided by others in this specific case. What I'm saying is its a trading business closer to the financial sector than say, manufacturing. They go bust because they make bad bets and buy stuff they can't shift that falls in value, they can go bust in any financial climate if they simply don't sell with a high enough margin what they've bought. Its not really about return on proper capital investment. I bet they were pre-packed, the same people will be back at the same desks once the shitstorm has passed.

Edited August 18, 2010 by Cogs

[Bloo Loo]

None of it a massive deal, the IT infrastructure is largely provided by others in this specific case. What I'm saying is its a trading business closer to the financial sector than say, manufacturing. They go bust because they make bad bets and buy stuff they can't shift that falls in value, they can go bust in any financial climate if they simply don't sell with a high enough margin what they've bought. Its not really about return on proper capital investment.

I gather the sun4u or whatever had 40 call centre staff.

the Bond

http://www.abta.com/join/member_introduction/bond

[Bloo Loo]

None of it a massive deal, the IT infrastructure is largely provided by others in this specific case. What I'm saying is its a trading business closer to the financial sector than say, manufacturing. They go bust because they make bad bets and buy stuff they can't shift that falls in value, they can go bust in any financial climate if they simply don't sell with a high enough margin what they've bought. Its not really about return on proper capital investment. I bet they were pre-packed, the same people will be back at the same desks once the shitstorm has passed.

Do you like to be paid?

If you ran a travel Agency, just yourself, how much would it cost to run at BReakeven and pay you your salary, NI and company car?

How many economy trips to Marbella for 4 self catering for £140 per week, less credit card fees, are you going to have to sell?

[Cogs]

Do you like to be paid?

If you ran a travel Agency, just yourself, how much would it cost to run at BReakeven and pay you your salary, NI and company car?

How many economy trips to Marbella for 4 self catering for £140 per week, less credit card fees, are you going to have to sell?

Loads, its a volume skimming business as I said. Not sure why you keep banging away at this, the point is they can ****** up even in a booming market if they wind buying at too higher price owing to perceived scarcity. Their overheads are not the main problem, bad positions are, which is why for all the hype the famed internet providers still haven't really taken off as independent businesses because getting rid of an office or two of people isn't enough to catapult you into extreme profitability anymore than Northern Rock is going to become viable if only they change their photocopier supplier to a cheaper brand. Faulty analysis of the industry as per your own I'm afraid.

Edited August 18, 2010 by Cogs

[The Ayatollah Buggeri]

The time to really watch out will be when the credit card companies start protecting themselves big time against Consumer Credit Act claims, e.g. by not handing any money over to the tour operator until after the customer has returned from their holiday. This practice was alleged to be behind the collapse of a small Scottish airline, the name of which I've forgotten, a year or two ago (though I suspect that a lot of it was Anglophobic whining by a Scottish airline against an English-based credit card handling company, and that the airline was fundamentally unviable anyway). If they start doing that to the likes of Thomson and Thomas Cook, then the writing really is on the wall.

[Bloo Loo]

Loads, its a volume skimming business as I said. Not sure why you keep banging away at this, the point is they can ****** up even in a booming market if they wind buying at too higher price owing to perceived scarcity. Their overheads are not the main problem, bad positions are, which is why for all the hype the famed internet providers still haven't really taken off as independent businesses because getting rid of an office or two of people isn't enough to catapult you into extreme profitability anymore than Northern Rock is going to become viable if only they change their photocopier supplier to a cheaper brand. Faulty analysis of the industry as per your own I'm afraid.

I guess you have never run even a lemonade stand.

overheads, unsold stock, its all the same....they run out of cash. YOU, nor I wont be privy to the FACTS in ANY case.

[jonb]

The time to really watch out will be when the credit card companies start protecting themselves big time against Consumer Credit Act claims, e.g. by not handing any money over to the tour operator until after the customer has returned from their holiday. This practice was alleged to be behind the collapse of a small Scottish airline, the name of which I've forgotten, a year or two ago (though I suspect that a lot of it was Anglophobic whining by a Scottish airline against an English-based credit card handling company, and that the airline was fundamentally unviable anyway). If they start doing that to the likes of Thomson and Thomas Cook, then the writing really is on the wall.

I don't recall it being an English credit card company. I thought it was based in Cyprus. It managed to fall outside the usual banking regulations and they had absolutely no money in the pot when a normal credit card processor like RBS streamline is required to have all the money deposited in low risk investments. They had invested all the money in other business ventures which had failed.

Also, the money being withheld related to holidays where the passenger had returned home up to 6 months ago. There couldn't be any claims in respect of those.

[The Ayatollah Buggeri]

I distinctly remember the company being described as Kent-based in the media coverage, and the chief exec of the airline complaining that their practice of withholding payments until after flights had taken place was 'detrimental to Scottish business' or equivalent wording.

[Jie Bie]

I distinctly remember the company being described as Kent-based in the media coverage, and the chief exec of the airline complaining that their practice of withholding payments until after flights had taken place was 'detrimental to Scottish business' or equivalent wording.

The operator in that case was Globespan.

Was sorry to see them go bust, me and the gf went on a pretty decent package holiday to the Algarve last summer that we bought straight off the Globespan website.

From what I read at the time a big part of them going bust was indeed the company that processed their card payments withholding money. As another poster says it was alleged this happened to payments even after holidaymakers were back home.

Not sure why they didn't switch to another payment handler, although I assume none of the usual ones wanted to touch them due to rumours they were in trouble. Sadly for them the rumours probably turned into a self-fulfilling prophecy.

[deflation]

Not sure why they didn't switch to another payment handler, although I assume none of the usual ones wanted to touch them due to rumours they were in trouble. Sadly for them the rumours probably turned into a self-fulfilling prophecy.

That, in a nutshell, is why it's always at such short notice when a travel firm goes under. The slightest whiff of trouble and no-one will handle their bookings or process payments. They smile and say 'all is fine' until they admit defeat.

When sun4u went under, one person interviewed paid a fee to carry extra luggage at 14:30 on the Friday, 2 hours before they ceased trading.

[Democorruptcy]

What's to stop someone opening a holiday firm up, selling flights and/or holidays, pocketing the cash, let the firm go bust and don't pay the suppliers/staff expecting money?

Any serial offenders who have worked for more than one failed firm?