Time Bomb Ticks by as Irish Tour Operator Collapses

Travel experts have warned of a “ticking time bomb” for travel companies as Ireland’s biggest tour operator goes to the wall. PriceWaterhouseCoopers claim the demise of Budget Travel could herald the start of a wave of insolvencies across the sector.

For the first three quarters of this year the rate of travel insolvencies was 13 percent higher than for the same period in the previous year. Ian Oakley-Smith, director, PricewaterhouseCoopers LLP, says that “despite an increase in failures this year, the travel sector has experienced a relatively low rate of insolvency, compared to other Hospitality and Leisure sectors, so far. “This is starting to change as we see big names such as Budget Travel fall foul of the recession.”

The collapse of Budget Travel will result in 172 job losses, 17 agency closures and 750 people stranded abroad. A further 380 people were due to fly out on holidays with Budget Travel between tomorrow and Sunday from Dublin and Cork.

Flights have been cancelled and passengers have been informed by the Irish Commission for Aviation Regulation they are entitled to refunds. Budget Travel claimed almost a third of the Irish travel market.

Its demise comes at the same time as the European Commission mooted that travelers who book holidays online or with budget airlines could receive greater financial protection if companies go bankrupt.

The rate of travel company insolvencies since the last quarter of 2007 stands at 134, with the highest figures coming in the third quarter of 2008 (24) and the first quarter of this year (27). So far there have been 39 collapses this year, compared to 62 last year.