Almost a quarter of Atol holders are not confident of being able to meet financial requirements needed to renew their licences at the end of the month, according to new research by business consultancy FRP Advisory.
FRP surveyed 250 Atol holders as part of its Travel & Tourism: Time for Take Off report to understand their financial outlook for the year ahead.
The survey found 24% of businesses feared losing their licence in the coming weeks due to financial restraints – this is despite 59% of firms expecting to make more bookings in 2022 than they did in 2019.
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Almost a quarter of Atol holders are not confident of being able to meet financial requirements needed to renew their licences at the end of the month, according to new research by business consultancy FRP Advisory.
FRP surveyed 250 Atol holders as part of its Travel & Tourism: Time for Take Off report to understand their financial outlook for the year ahead.
The survey found 24% of businesses feared losing their licence in the coming weeks due to financial restraints – this is despite 59% of firms expecting to make more bookings in 2022 than they did in 2019.
Almost one in four (23%) of respondents said they weren’t confident they could survive the next 12 months without the need for lender, stakeholder or government support.
More than two-thirds (68%) of the businesses surveyed also expect to come under pressure from creditors in the year ahead, which includes being the subject of potential winding-up petitions and County Court Judgements.
FRP’s data also revealed operators expect average 40% of future revenue to be provided through refund credit notes in 2022, opening up the travel sector to further cash flow issues in the coming months.
As a result, 95% of respondents said they had seen their supply chain partners demanding pre-payment, payment in full, or both, for services.
Simon Stibbons, restructuring advisory partner at FRP, said: “The overseas travel industry is starting to turn a corner, with lots of pent-up demand ready to be released. But tourism was one of the first sectors to be hit by the pandemic and is likely to be one of the last to emerge from the crisis, so the industry has a long way to still to go.
“Indeed, many firms are approaching an inflection point that threatens their ability to keep trading – with Atol membership clearly essential for customers’ peace of mind at this critical time. March’s deadline, and firms’ preparedness for it, presents a severe short-term challenge for operators that have been weakened by the crisis.
“That said, the potential for a strong recovery in the year ahead is plain to see, so it’s critical that firms do all they can in the next few weeks, working with stakeholders, to ensure they are match-fit and able to capitalise on the expected uptick in bookings in the coming months.”
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