Plimsoll Publishing’s latest review into the top 1000 businesses operating in the tour operators industry has found that 77 companies are showing the same characteristics as HMV, Comet and Blockbuster.
According to the company, sales have worryingly declined in the latest year and profitability has plummeted to such an extent that these businesses are now operating under severe financial pressure.
David Pattison, senior analyst on the project, said: “As seen with the recent closures and administration of big High Street stores, these were all victims of outdated business models. It’s much the same in the tour operators market, the overall market is healthy, but these companies are falling behind.
“The tour operators market is continually adapting to the way we use technology, delivery methods and trading hours.
“These phases of the business cycle often lead to casualties. What's different this time is the pace of this change as, in the past, it’s taken up to ten years for a large company to fail, but technological changes have meant it’s now only taking a few years.”
Some 77 companies analysed have seen their sales fall by up to 20%, with two thirds losing money and many seeing productivity fall to such an extent that they are becoming increasingly uncompetitive in a fast moving market.
The latest analysis also shows that the tour operators market is in a healthy state and on average sales are increasing at 7.2%, with margins sitting at 1.8%. Some 50 companies are also showing increased profitability and sales.
Pattison said: “The good news is if we do see job losses, it’s highly likely that by moving to an up-and-coming rival, jobs will be created and the overall number of staff in the market could stay the same using transferable skills.”
Readers of Travel Bulletin can receive a £50 discount off the price of the report by calling 01642-626419 and quoting reference PR/HP70.