Travel facing 'storm' as winding up protection ends

Begbies Traynor partner Julie Palmer, said: “In the last quarter, there has been an easing of travel and tourism companies in significant distress.

"Many will have been able to pay off some creditors as consumers rushed to take advantage of the good weather for a staycation, being double jabbed, or flights to other countries opening up.

“However, the moratorium on winding up orders has been delaying what could be a flurry of court activity and creditors calling in the payments they have been without for a long time.

“With that now over, it feels like we are at the edge of a storm. A 90% year-on-year increase in County Court judgments this quarter (across all industries) shows that momentum is gathering pace and creditors are starting to call in their debts. It is because of this the decrease in distress could be temporary.”

Opportunities

Palmer said there were various way companies could help themselves, including administration, Company Voluntary Arrangements and fast-track CVAs – a rapid method for turning around businesses that were viable before the pandemic.

“Many creditors would prefer to wait longer to get all that they are owed than take a hit on debts,” she said.

Palmer added there was a bright side to the current situation, with cheap finance available.

“Some companies that are nimble and talented will see the opportunity to swallow up the competition and grow their own teams to cement a position in the market,” she said.