Business information provider Equifax has warned small businesses to keep an eye on invoice collection and bad debt as travel companies teeter on failure during the recession.
The company has drawn up a table to reveal the credit scores of the some of the best known names in travel, with some surprising results.
Equifax’ scorecheck ratings table found that Brittany Ferries and Primary Capital Ltd, which owns Great Rail Journeys, had the best scores, along with cruise operator Carnival. The first two companies chime with the sustained demand from UK holiday makers for staycationing and sea travel.
Cosmos and TUI UK’s Thomson and Crystal had the lowest scores.
Brittany Ferries and Primary Capital got 100 points – with one being the worst credit risk and 100 the least – while Cosmos and TUI got 11 and 8 points respectively.
The table also shows foreign travel operators in murky waters as the recession bites.
However, Virgin Holidays scored highly. The operator scored 75 and Thomas Cook and Kuoni were midway with 54 and 50. Lower down the table were Travelspere (44), Fred.Olsen Cruises (44) and Egencia (29).
Head of Equifax Commercial Information Solutions Nic Beishon said: “The economic down-turn continues to have an effect on how people spend their money and certainly seems to have had quite an influence on holiday plans over the last 18 months to 24 months.”
“There have been a number of reports that sales of UK-based holidays have stayed healthy whilst sales for trips abroad have declined. Our own ScoreCheck ratings seem to reflect this trend.
He added: “We should be hopeful that others will not follow the fate of the recent failures at Sun4U and Goldtrail, but the reality is that business is unlikely to get any easier for tour operators and other travel companies for the foreseeable future.
“More so than ever, it is therefore crucial that those providing services to travel companies keep a very close eye on the financial performance of their key customers and endeavour to keep invoice payments under close control.”
Equifax examined various financial factors including accounts data, age of accounts, trading stability, profitability, working capital, gearing and legal and court information.
by Dinah Hatch
