p12-13 WTM analysis nov21 19/11/08 21:59 Page 13
ttglive.com
atol debate wtm 2008 news
World Travel Market • November 10-13 • ExCeL, London
e XL factor we should watch
WTM report
How to survive the recession
Consolidation and survival, not prosperity,
should be the priority for travel firms in
2009 as the downturn bites.
Andrew Burnham, of accountants
McIntyre Hudson, urged firms to take a
fresh look at their businesses, their costs
and the assets they own.
He advised firms to get rid of unnecessary
costs but warned them not to cut too much
“because there will be opportunities you
will need to take advantage of”.
Predicting more consolidation in the
industry, he said: “The stronger businesses
will definitely have opportunities.
“We are seeing more clients who are look-
ing to grow, positioning themselves to take
advantage of the weaker, looking to buy at a
level they were not able to six months ago.”
Bowen said the UK economy could become
deflationary next year, with interest rates
and inflation at or below 0%. He forecast
unemployment to rise by 100,000 a month.
Bowen and Burnham’s top tips
■ Retain existing customers, as finding new
business and markets is costly.
■ Manage cashflow and resist the
temptation to eat into your capital base.
■ If you sell Atol-protected holidays, make it
er
clear to an increasingly nervous consumer
alk
that you offer total financial protection.
Damian W ■ Hedge against fluctuations in currency
rates, as the pound is expected to continue
CAA staring into a bottomless pit has also significantly shrunk and become to fall against the euro and the dollar.
Another fallout of the XL collapse is likely to be more expensive; only those firms considered ■ Maintain a good relationship with your
the scrapping of any plans other trade bodies to be the highest risk are expected to be bank, particularly as loans come up for
had of passing on their bonding to the CAA. bonded. renewal.
Abta, Iata and the Passenger Shipping This has severely impacted on companies’
Association are all known to have started talks ability to find appropriate non-Atol bonding as Take risks out of your business by. . .
with the CAA about passing the risk of bonding part of their membership of trade bodies. ■ Making sure suppliers offer scheduled
non-air packages on to it. Bowen advised travel companies to avoid airline failure insurance.
Bowen said the CAA’s enthusiasm to be the having to provide bonds where they could in ■ Tightening credit terms or severing links
sole provider of protection had waned of late. 2009. with suppliers you have doubts about.
“A year ago the CAA would have said ‘yes’, “Insurers will be wary about providing bonds ■ Avoiding demands to provide bonding
but unfortunately now it is staring into a in 2009 unless you are the perfect company, where possible.
bottomless pit with no money in it,” he added. and if you are the perfect company you will not ■ Talking to trade associations about what
Because the CAA scrapped bonds for most be required to provide a bond,” he said. support you need.
companies under APC, the bonding market “It’s a great catch-22.”
21.11.2008 13
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