I never envisioned myself as an analyst who would be predicting the end of tourism as we’ve known it. But with all the dreamy prognostications of so-called experts lately, I feel like somebody has to paint the alternative contingency. I mean, just in case, you know? Another tour company failure prompted me to write for you, the following cases to study.
News that Skylink Travel & Tours Ltd (Atol 9839) has gone under is the latest in an avalanche of tourism businesses ruined by the coronavirus pandemic. However, even though the bankruptcy catastrophe has been a world shaker, experts think the worst is yet to come. Here’s a cautionary report, on the biggest snowball effect ever recorded.
No Boutique Travel, No More
Skylink Travel, which is headquartered in London, was fairly small tour company licensed to carry as many as 500 Atol-protected passengers. The company’s website has been taken down and a message saying the company has stopped trading has taken its place. It’s but one of the hundreds that may soon shutter their businesses in the backwash of this unending pandemic. A tiny snowball, if you will, that should cue us to look up the mountain for the devastation to come.
If tiny London tour companies are the pebbly snowballs of world ending catastrophe, then STA Travel, which filed for bankruptcy back in August, is a boulder rolling downhill onto not only stranded travelers and creditors were left holding the bag, this should be our focus. An announcement this week from the liquidators of the company tells creditors they will not get one red cent from the drowned agency. But, what about the creditors holding the bag for the entire industry? Or, better still, all the industries? With unemployment across every sector rising, and wide ranging depending on the region and state, how will anyone afford a vacation?
This past summer student travel company WorldStrides, and parent company Lakeland Tours LLC filed for bankruptcy, claiming that the pandemic. The bankruptcy is a big deal because WorldStrides is the largest accredited travel program in the U.S. The company organizes educational trips for more than 550,000 students annually. Students who once dreamed of learning European culture first hand, they can now stay home and tune in their PCs, if the PC and internet companies do not go bust too. Oh, and I should mention here that Cities Direct and Shearings failed late last year, as did National Holidays and Wallace Arnold.
Hertz Gone, Say What?
Then let’s look at Forbes, and the magazine’s reporting some of the biggest business failures in history linked to COVID1-19. In the travel sector, one of the biggest was Hertz rentals. This one is huge, as big, medium, and small businesses around the world are disappeared by this unbelievable catastrophe. Not only will you miss the Hertz signs at airports, the planes would won’t see logos on include LATAM Airlines Group, Avianca Airlines, Norwegian Air, Thai Airways, Air Italy, Virgin Australia, Flybe, India’s Air Deccan, Sweden’s BRA airlines, South African Airways, Aeromexico, and dozens of other regional airlines are now defunct.
In the tourism and hospitality sector, Hotel bankruptcies in Japan, for instance, jumped almost 60% in 2020. On a more intimate level, news World War II veterans were shocked when Beyond Band of Brothers Tours went belly up on their dreams of revisiting those Europe battlefields is a poignant reminder. Even Richard Branson’s Virgin Atlantic, has now plunged into the deadpool, and the list of brands that are no longer solvent is almost endless. And I’ll not even go into TUI’s impossible debt after successive bailouts. The German tour megalith was already broken, if not for Angela Merkel’s administration and Russian oligarch clout.
Just looking at some of the names, makes this write feel like the world may be coming to an end. In the U.S. retailers like Belk, the gunmaker Remington, and world famous Gold’s Gym going under simply stuns the popular culture senses. Chuck E. Cheese is gone, and is nutrition brand GNC, JCPenney, while rumors of Sea World going bust hint at an ultimate collapse of everything we once knew.
There Is No “Back” From This
And if you heard of China’s HNA Group going bankrupt, as a huge embezzlement case emerged, you may get visions of the fall of Rome as well. What is to come, if vaccinations don’t roll out quicker, will be a feeding frenzy not seen since the Dark Ages. A lead for a story in Helsinki Times fits nicely here:
“THE COVID-19 PANDEMIC may not necessarily lead to the broad cross-industry wave of bankruptcies that many feared during the first infections in Finland.”
The gist of the article is about “wiggle room”, and relative debt. On a local and regional level, the lack of liquidity will have varied effects from mild stagnation and moderate businees closures, to the far more catastrophic effects for places where imbalanced economics are at play. Meanwhile, PricewaterhouseCoopers says bankruptcies will remain constant throughout 2021. But no one, and I mean no one is talking about the trickle down effects caused by unsustainable economic practices.
Travel and hospitality businesses have been operating on razor thin margins for decades now, so there is no “wiggle room” for anybody. The “experts” are all talking about the great “turnaround”, but we need to make a contingency for “no way back”. Read this story of an airline pilot forced to go to work as a delivery boy for billionaire Jeff Bezos’s Amazon.
This will be the focus of Part II of this report.
