Almost one week after a Birmingham travel firm collapsed leaving hundreds of holidaymakers stranded abroad, industry experts have warned more tour operators may follow suit.
Sun4U, based in the city centre, announced it was bankrupt last Wednesday leaving more than 1,000 holidaymakers stuck in Spain - some having to pay out more cash for their accommodation.
The travel company had been operating for just six years and had a total of 92 employees.
Managers at the cash-strapped firm blamed the volcanic ash cloud for hindering customer holiday bookings and the closure of larger tour operator Goldtrail, who provided flights for the city agent.
Chris Gray, from the Trade Travel Gazette, said the travel industry had suffered from the lack of bookings made for this summer and the general downturn in trade over the past two years. “There has been a significant reduction in the number of holidays booked abroad this year.
“The number of travel operators going bankrupt is very unusual at this time of year - it’s not only small operators that have been affected either.”
“Companies tend to fail after the summer towards the autumn but there have already been two bankruptcies during this years’ peak holiday time. The fear in the industry is that there is more to come.”
The collapse of Sun4U came less than a month after Surrey-based Goldtrail Travel called in the administrators and nine months after the demise of Scottish package-holiday provider and airline Globespan. In 2007, XL, who also had a fleet of airlines, declared it was bankrupt.
Mr Gray’s view was shared by accountancy firm MacIntyre Hudson’s head of travel Andrew Burnham. He predicted conditions would not improve until 2012, because of the combined effect of two years of recession and record low interest rates.
He said: “It’s surprising that people are going in the summer period because the cash cycle is normally at its most healthy stage at that point.
“You can cut costs for a time but the cash will drain away and it is cash shortages that is causing these businesses to go now.”
Meanwhile hundreds of travellers are still bearing the brunt of Sun4U’s demise.
Kim Blackledge had travelled on an all-inclusive package with her husband and three kids to Benidorm on Wednesday, just a few hours before the company announced it was going into administration.
Like many other holidaymakers who had paid for all inclusive deals with Sun4U, Kim was left with no choice but to pay another 780 euros (around £640) after paying more than £1,000.
She said: “Luckily for us I’d brought my visa card with me or I would’ve been snookered.”
“For the first couple of days there were many people in a bad mood, but people have realised that in most cases they can claim their money back when they get home.”
“Speaking to people around the pool, it seems this experience has put people off travelling abroad for a holiday and I think more people will be staying home instead of going abroad next year.”