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UK Tour Operators Face ‘Make or Break’ 2012, Says KPMG

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According to an article on, tax audit and advisory conglomerate KPMG has warned that many United Kingdom tour operators will go under this year unless they make undertake big strategic changes in their business models. Such changes would be in response to a challenging market environment where money-pinched consumers are flocking to low cost carriers and online bookings, and are to see increases in fuel and air surcharges.

Richard Hathaway, KPMG’s Head of Travel, Leisure and Tourism, said:

The traditional high-volume tour operating model based on customers pre-booking flights and accommodation packages well in advance is in long term decline as more and more travellers opt for self-packaging online and niche solutions. To survive, operators must ensure that they are flexible and in a position of financial strength. Operators who do not adapt their business model to meet the demands of today’s holidaymakers will face increased risks in the next year, including takeover or business failure…

The UK tour operator market especially for overseas travel is shrinking. After a long period of year on year increases, the total number of overseas holidays taken by UK travellers has seen a 20% decline between 2008 and 2010, and now stands at about 36 million per annum, a level last seen in 1999.

The article’s author, Michelle Romo, added that in the same time period, the number of packaged trips sold has declined to those seen in the mid nineties, while UK travelers book travel online at a higher rate than the rest of Europe.

For more in-depth information and KPMG’s advice on how tour operators can adapt and buffer themselves from these shifts in the U.K. market, read the entire article.



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