The latest Business Distress Index data analysis for small and young businesses has revealed the number of travel and tourism start-ups in the UK in significant financial distress* has leaped 21% (to almost 4,000) in Q2 as the UK feels the impact of coronavirus, putting 15,000 SME jobs in jeopardy.
As well as analysing the increasing number of start-ups in distress (business three years and under in age), the research used Red Flag Alert data to find that there is currently 3,700 SMEs in significant distress in the travel and tourism sector– an increase of 2% since Q1 2020. The uncertain future at these SMEs is effectively putting 15,000 jobs at risk in an important sector for the economy.
However, the number of SMEs in distress in the travel and tourism sector only makes up 1% of all the 520,000 SMEs in distress across UK sectors. Support service SMEs account for 16% of all these significantly distressed businesses, with construction SMEs (13%) and real estate and property SMEs (11%) close behind.
Shaun Barton, National Online Business Operations Director at RealBusinessRescue.co.uk who carried out the data analysis, said: “As expected, the travel and tourism sector has been deeply affected by the severe movement restrictions imposed earlier in the year. Consumer demand fell off a cliff overnight as popular tourist sites were closed and the ability to travel within the UK and abroad was curtailed.
“As a result, young start-ups firms who have capitalised on strong consumer appetite for travel and tourism have been confronted with a drastic drop in demand and resulting financial difficulty as shown in our data analysis for Q2. It is hoped that although a return to previous foreign travels volumes won’t be seen for a considerable while, the easing of restrictions across the UK will encourage consumers to perhaps holiday in the UK this year and bring a rebound in activity for a sector that has been hard hit over recent months.”
