More than 40 travel agencies crashed in 2012 thanks to downturn and disasters

Arab spring, Thai floods and online bookings add to industry problemsThe economic downturn, natural disasters and the Arab spring have combined with surging internet bookings to force 41 UK travel agents into bankruptcy during 2011, research reveals.The woeful year for the sector has worsened the deficit for the compensation pot that protects holidaymakers when operators collapse. The Air Travel Trust (ATT) Fund is �42.3m in deficit, a 33% increase on last year.A partner at accountants Wilkins Kennedy, Anthony Cork, who conducted the study, said: "With Thomas Cook forced to go through a dramatic restructuring programme and a number of major tour operators, such as Holidays 4 UK and Dream Holidays, ceasing trading over the last year, the travel industry is clearly suffering."Lower real incomes as a result of higher inflation have greatly impacted consumers' discretionary spending. Rising unemployment is also causing many to worry about their job security, so they are holding off booking their holidays or downsizing their holiday plans."The accountants added that revolutions in the Middle East and floods in Asia have hit bookings, especially to popular package destinations such as Thailand, Egypt, Tunisia and Morocco. However, the long term trend is for travellers to bypass traditional operators and tailor their own packages via the internet."The internet has turned the traditional tour operators' business model on its head," Cork said. "People are increasingly confident in booking their holidays online. Rather than booking from a catalogue months in advance, they use low-cost airlines, put together the components themselves or wait for last-minute special-offer hotel deals."The accountants warned that the Civil Aviation Authority, which administers the ATT fund, will come under pressure to plug the deficit by increasing the levy, which stands at �2.50 per package holiday."It is inevitable that if there continue to be more insolvencies within the industry, the levy will increase," it says. "Travel companies will have to raise their prices to reflect that, making it even more expensive for customers to go on holiday."Wilkins Kennedy's gloomy review of the year came as a separate study found that Britons booked an increasing number of holidays in the UK in 2011. They made 7% more bookings for trips in Britain than in 2010, a survey by travel company Expedia.co.uk found. Spain and Turkey gained more UK visitors as tourists turned away from some North African countries. The most popular spot for travellers was southern England, followed by London.The survey of booking patterns also showed that hotel bookings for the Greek islands, Madeira and the Algarve, as well as Kenya and European destinations such as Sofia in Bulgaria and Tallinn in Estonia, had growth of 25% this year. Andy Washington, Expedia UK and Ireland managing director, said: "This year has highlighted the mixed approach to holidaying taken by Brits in troubled times. As some are drawn to holidaying at home, others look for alternative destinations, with Spain and Turkey particularly growing in popularity during the Arab spring."Travel & leisureThomas CookArab and Middle East unrestRecessionSimon Goodleyguardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

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