The recession has cost the UK tour operators industry £2.1billion in lost profit in the last year according to new research by market analysts Plimsoll.David Pattison, senior analyst and author of the Plimsoll Analysis – Tour Operators, said: “The recession has hit the sector hard with more than half of the companies analysed in our new report making less profit than they were a year before.
“With demand so subdued and the resultant competition, many companies are unable to charge the price they need to make healthy profit margins. In the absence of pricing power many companies will have to make painful but necessary cutbacks in the next 12 months.”
However, according to Pattison the burden of lost profit is not being shared equally.
He said: “Some 570 companies have bore the brunt of the downturn. These companies have seen their profit margins decimated and in the absence of a big upturn in demand will have to cut their cloth accordingly. “Amazingly, there are 233 companies that have maintained or increased their profit margins in the last year. All things considered that’s a pretty good achievement. While some of these companies made cut backs to match their lower sales expectations others have managed the Holy Grail – they have grown their business and increased their profit margins in a recession. Those companies l Continued on next page l From previous page prove that an efficient business selling the right product to the right market can still succeed.”
The new Plimsoll Industry Analysis – Tour Operators gives an instant performance rating on the top 1,000 companies in the market. Each company has been rated as Strong, Good, Mediocre, Caution or Danger according to their latest performance. A graphical and written analysis will tell you which companies are in trouble and who is getting it right.
Readers of Travel Bulletin can receive a £50 discount of the analysis by calling 01642-626400 and quoting PR/HP70.