Travel Agencies Closure and Rescue Options

The travel agency industry is in constant flux. Changes in the cost of living, a shift away from brick-and-mortar travel agencies, along with the more universal issues of increasing operational costs, business rates, and rising wages, can all pose challenges for travel agency businesses.

If your travel agency is experiencing financial difficulties, seek insolvency advice to explore potential options for closure or recovery.

Common financial challenges for travel agents

We can help advise on specific financial issues that may affect your travel agency business. These could include, but are not limited to:

• Changing customer habits
  Booking holidays and trips have become much more self-directed, with a heavier emphasis on booking online rather than through traditional brick-and-mortar outlets. Additional investment into an online presence may be needed to help alleviate these issues, with those still operating out of physical shops.
• International incidents
  Events overseas, such as natural disasters, political instability, and public orders that restrict travel can cause a travel agency a detriment if it has customers already in or planning to travel to that destination. This can lead to cancellations and a subsequent loss in revenue or expenses in providing provisions for customers at that destination.
• Economic fluctuations
  Changes in international currency values and exchange rates can decrease takings and margins, with price increases to account for these having the potential to put customers off.
• Bounce Back Loans (BBL)
  The government initiative of Bounce Back Loans were very important during the pandemic. However, companies are now having trouble repaying them. We can give you advice on what options you have when it comes to repaying the loan and how a BBL would be treated in various insolvency options.

How we can help rescue your travel agency company

Below are two formal insolvency procedures, which would allow your travel agency to continue trading whilst being protected from creditor action:

• Repaying company debts through a Company Voluntary Arrangement (CVA)
  A CVA is a formal repayment plan that allows companies to repay their unsecured debts in instalments tailored to what the company can afford monthly. This would include managing property and lease negotiations and aiding in negotiations with landlords. It would allow your travel agency to continue trading and to retain all your company’s goodwill and reputation with customers whilst being protected from any legal action. CVAs typically last five years, and once concluded, any remaining unsecured debt is written off.
  More on a Company Voluntary Arrangement
• Restructuring the company through administration
  If your travel agency’s situation requires more substantial restructuring, directors can explore administration. A licensed insolvency practitioner will act as an administrator while trying to return the travel agency to a profitable state. Administration is a temporary state wherein the company is protected from creditor pressure, allowing the administrator to restructure the company into a more efficient, profitable operation whilst exploring additional revenue streams to return the company to a stronger financial state.
  More on administration

How we can help close and liquidate your travel agency company

If your travel agency is insolvent and creditor pressure has reached a level which means the business cannot continue to trade, the liquidation of your catering company would draw a line under its operations and write off its unsecured debts.

• Closing your travel agency company down via a Creditors Voluntary Liquidation (CVL)
  A CVL is a formal insolvency procedure designed for companies that are insolvent. The process would formally close and liquidate your company, drawing a line under your company’s debt, writing off its unsecured debt and giving you, the director, a chance to move on and start afresh.
  More on Creditors Voluntary Liquidation
• Close your travel agency company down and start again via a pre-pack liquidation
  A pre-pack liquidation is a form of CVL, where a newly formed company agrees to pre-purchase the assets of an existing company, which is then formally liquidated. This procedure would enable you to continue trading your business in a new limited company, retaining key assets, keeping your customer base and business relationships without the historical unsecured debts of your previous company.
  More on pre-pack liquidation

Commercial finance for travel agencies

If the company has an otherwise healthy cash flow but a large, upcoming payment risks pushing it into the red, commercial finance could be a viable solution. There are a range of finance options potentially available that can help cover a one-off expense or a gap in the company’s incoming payments. Speak to us for a more detailed breakdown of which commercial finance options best fit your company.

How to get in touch with us: The next steps

If your travel agency business is facing insolvency, it’s important to understand the different closure and recovery options available. Our initial advisers will offer a comprehensive explanation of the different options available to you, and our experienced consultants will look at tailoring our processes to your travel agency company’s circumstances.

Contact our initial advisers, who can advise you on your company’s solvent position and outline the options best suited to its circumstances.

1. Speak with our initial advisers
   Contact our team via phone or online chat. If we can help, we will arrange a free consultation with one of our consultants to discuss your situation in more depth.
2. Initial Assessment
   During the consultation, we will advise if an insolvency procedure is the most appropriate route forward or what alternative options are available.
3. Formally engage with Wilson Field
   After your consultation, if there is an appropriate route forward, we will issue the relevant documentation for you to formally engage us.

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