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More failures to come, warn travel experts

Travel experts are predicting further travel company failures in light of the Goldtrail collapse.

Caroline Bremner, global travel and tourism manager for Euromonitor International, said: “The significance of Goldtrail’s failure is not down to its size as its customers represent less than one per cent of UK outbound departures. Instead, its demise is a warning sign to other travel companies that the industry is not out of the woods yet.

“The company’s failure comes at a time when [Euromonitor believes] the UK outbound volumes will decline further by 6% this year to reach 55 million and positive growth will not return until 2012.”

Nick Harris, head of Holiday and Travel Law at Simpson Millar LLP in Manchester, believes Goldtrail won’t be the only company to go under this year.

“Although a growing number of small holiday firms have gone belly up, the peak of the holiday season usually goes some way in postponing these failures,” he said.

“It is usually in the autumn when travel firms go bust. The timing of the Goldtrail failure is concerning but I doubt it will be the only travel business to face closure in 2010.”

He also believes the company’s demise heralds the end of the dynamic package.

“The collapse of holiday firm Goldtrail will almost certainly put a nail in the coffin of the ‘dynamic packaging’ concept,” he said.

“Dynamic packaging was created to feed the hunger for cheap, no frills travel. However, many customers are unaware that some of these cheap providers are not accredited by ATOL, ABTA or the CAA which can have disastrous results if the company fails, as happened with XL last year.

“My advice to travellers is to avoid dynamic packaging where possible, or make sure that providers are accredited and have a solid reputation.

“Saving a few pounds can be a false economy in the long run and that cheap getaway can quickly turn into a holiday from hell.”

By Bev Fearis @ Travelmole