Travel and tourism: time for take off
When we asked firms how confident they are that all the businesses in their supply chain will continue to trade through the next 12 months, it was reassuring to hear that 80 per cent felt their trading partners would go the distance – though that does leave one in five (20%) expecting distress in the supply chain. And the cashflow crunch means that the overwhelming majority (95%) of suppliers are demanding either pre- payments, payment in full, or both, for their services.This presents a severe short-term challenge for firms that have been weakened by the crisis and are over-indebted or under-capitalised, presenting the danger of a corporate insolvency domino effect through the supply chain.
Open and honest
The good news is that firms have time to plan for and mitigate these risks. Products like trade credit insurance, which protect businesses against customer and supplier insolvency risk, can be part of the solution, along with investment in payment monitoring and debt recovery services. And, while interest rates are rising, the cost of funding remains comparatively low. Clear and honest communication with all stakeholders, including lenders and debt providers, will therefore be key. How confident are you that all businesses in your supply chain will continue to trade through the next 12 months?
Spotlight on: The Bucket List Company
The year ahead
The Bucket List Company was founded in 2017, providing group trips to off the beaten track destinations in Africa, Asia, Europe and the Americas – from trekking the Inca Trail in Peru to mountaineering in Nepal. While the business did manage to take limited numbers to green list countries including Morocco and Malta in 2021, most of its usual destinations have been off the agenda for the last two years. Though Managing Director and Founder Keith Crockford is bullish about the year ahead, he says the pandemic forced the firm to ‘batten down the hatches’ temporarily. He said: “Back in 2020 we had a five-year plan. We’re basically starting that again in 2022, so we’ve lost two years of growth.” The Devon-based business, which has six employees, did benefit from Government support during the pandemic, including a Bounce Back Loan and the furlough scheme. Keith added: “Furlough was difficult for the industry because we still had to communicate with our customers and deal with postponed and cancelled trips.
“Fortunately, when part time furlough came in, it meant we could put some staff on a 2.5 day week and maintain a good level of customer service.” And Keith says his suppliers overseas have also weathered the pandemic well, without having to raise prices - yet. He said: “We locked prices in with our Destination Management Companies (DMCs) two years ago. We haven’t seen an increase in cost yet, though that may change going forward. It will be interesting to see what the effect has been on the ground, as businesses in the countries we visit haven’t had the support we’ve had in the Western world.” Ultimately, Keith says his firm’s niche providing once-in- a-lifetime experiences has helped protect its future. He said: “The type of trips we offer aren’t just holidays, we’re fulfilling people’s dreams, so more than three quarters of our customers chose to defer their trips, rather than asking for refunds. It means we now have a super busy 2022 ahead of us, running trips at full capacity. We’re raring to go!”
16% Not very 4% Not at all
*Results based on responses from 250 executives from ATOL protected businesses
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