Is the UK holiday sector braced for further turmoil?
Last week's demise of yet another British tour operator in the shape of Sun4U comes at a time when many in the UK are readying themselves for their annual holiday. It also comes only days after the biggest two players in the UK holiday industry, Thomas Cook and Tui, warned of a downturn in demand as the UK economic downturn continues to hit home. So can we expect further turmoil in the UK holiday sector?
It seems almost inevitable that short-term concerns within the UK banking industry may well squeeze some of the small operators in the UK holiday sector. This in turn could result in something of a domino effect leaving many niche players and smaller players struggling to find finance for the short to medium term. It will be interesting to see how well holiday prices hold up in the short to medium term because demand is starting to wane and this is even before the worst of the expected UK economic downturn on the back of forthcoming budget cuts and tax rises.
UK consumers have seen their "disposable income" reduced dramatically over the last couple of years and despite signs only a few weeks ago that the worst may be over it seems very much the opposite.
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