Research by insolvency practitioners Real Business Rescue has revealed 4,554 UK SME travel and tourism companies are now in “significant financial distress”– a 24% increase during the last quarter of 2020.
The website RealBusinessRescue.co.uk, which was set up by Begbies Traynor to advise business leaders in financial distress, also discovered that the number of start-up travel and tourism firms (established after 2017) in significant distress had increased by 23% in the last quarter due to the pandemic.
Shaun Barton, national online business operations director at Real Business Rescue, said: “The travel and tourism sector continues to be hit hard due to the drop-off in consumer demand and restrictive lockdowns that remain in place.
“We have a seen a 76% increase since March 2020 and another significant leap in the last quarter of 2020.
“With no end in sight, the industry is fighting for survival as it tries to navigate its way through until such times that travel and tourism operations can reopen fully again.”
Barton said businesses “which have little or no cash reserves” should “get ahead of the game” by considering restructuring action now.