Small and medium-sized travel companies have been urged by a leading banker to invest in their businesses.
Speaking at the annual Barclay’s Travel Forum, managing director of corporate banking Graham Buckland said: "We have got more appetite to lend that there is demand."
He said only 50% of small companies borrow any money, and even those that do take out loans only apply for half of what is available to them. The bulk of lending is to companies with a turnover of £25 million plus.
But he admitted: "Some people don’t come to us because they are worried they will get turned down."
However, he warned that if companies don’t invest in themselves they will get left behind by their competitors. "What we don’t want to see is that companies have not invested so they can’t take advantage of the economic upturn," he said.
Buckland said the bank had seen fewer corporate failures than expected since 2008, but over the past four to five years there had been a lack of acquisitions and expenditure. "What we have seen instead is corporate sitting on their hands and building cash piles."
He admitted this was in part due to vendors having unrealistic expectations about the value of their businesses.
However, Buckland said there were signs of confidence returning to the market. "Over the last two to three months, we have seen more event-based activity than in the past two to three years."
He said low interest rates and low inflation – neither of which are expected to increase for the next couple of years – should give companies the confidence to borrow.
