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UK holiday sector under pressure after collapse of Freedom Direct Holidays

The UK holiday sector is again hitting the headlines with news of the collapse of Newcastle-based Freedom Direct Holidays. The company currently has 200 customers on holiday and 9000 holidays booked for the future. Under the ATOL compensation scheme, those who have booked package holidays with the company will be compensated. However, those who have booked up with other tour operators, via the Freedom Direct Holidays website, should still be able to go on holiday if the company has "paid its bills" - although they will not be covered under the ATOL compensation scheme.

As we approach the crunch time for the UK holiday sector, there are concerns that a reduction in confidence and cash flow problems could cause significant issues in the short to medium term. Even though the airlines and holiday sectors have suffered dramatically since the recession began it is some time since we saw a prominent collapse in this area.

Even though life in the UK holiday sector has not been easy over the last 18 months, it has held up significantly better than many had expected with UK travellers seemingly intent on their two weeks in the sun. However, as the recession dragged on it became evident that something would have to give and holidays may be one such area where consumer cost-cutting will come into play.

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