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Brexit blamed for tourism company collapse

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Lowcosttravelgroup down with 27,000 people in resorts
The joint administrators of Lowcosttravelgroup have confirmed there are 27,000 customers abroad with 110,000 booked to travel, as the tourism company goes bankrupt.
The company’s B2B business lowcostbeds.com, which provided hotel accommodation to the travel trade, has also ceased to trade.
Administrators are being called in to try and sell the group’s assets. A source close to the matter told TTG that Brexit was directly to blame for the company’s downfall.
“OTAs are exposed to currency fluctuations. When the currency collapsed it created a great deal of uncertainty about travel companies from the banks,” he explained.
“It caused short-term doubt about the travel trade, meaning any person looking to invest in the business was dissuaded from wanting to do so. Banks suddenly lost confidence in the market.”
The company’s main market was the UK, but it was headquartered in Poland. A total of 451 people are being made redundant: 264 in Krakow, 120 in the UK, 60 in Majorca and seven in Switzerland.
Finbarr O’Connell of accountancy Smith & Williamson said: “The group experienced significant market headwinds in the run up to the EU referendum as holidaymakers delayed decisions. This was compounded by the Leave vote itself and the subsequent fall in value of the pound.”
The collapse is likely to be particularly hard-felt by consumers because since 2013 Lowcosttravelgroup has not been covered by the UK’s Atol protection scheme. The group operated out of Poland, Majorca and Switzerland, and so did not come under the UK’s jurisdiction.
The Lowcosttravelgroup was founded in 2004 and evolved into a €700 million business.
TTG Digital

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