The decision of Joe Walsh Pilgrimtours Ltd to cease trading on Tuesday was hugely disappointing if no great surprise, given the impact on the travel trade of Covid-19 lockdown restrictions over the past 14 months.
The company cited the State’s current travel restrictions and a failure to agree a payout on business interruption cover with its insurer as the main reasons for its decision to close its doors after 50 years in business.
A glance at the last set of filed accounts for Azulu Holdings Ltd – for 2018 – shows there was also a bank loan of €7.9 million relating to a property investment by a subsidiary company.
This loan was sold by its bank to a third party with the accounts stating that the group was in “constructive negotiations” to agree a long-term financing arrangement. Servicing such a debt in the absence of any income coming through the doors must have been hugely challenging.
No trips
JWT hadn’t undertaken any trips since the original lockdown in mid-March 2020. The interim period largely involved processing refunds or rolling over bookings to a future date.
Fortunately, it looks like no customer will be left out of pocket by the decision to close, and nobody was stranded abroad.
JWT’s demise is a reminder of the enormous challenges facing the travel sector as the economy begins to reopen.
Pat Dawson, chief executive of the Irish Travel Agents Association, is pressing the Government to retain the current wage subsidies and other supports for the sector out to March 2022, the point at which the trade hopes a greater level of normality will have returned to air travel, with tourism once again under way.
The Government would obviously prefer to phase out these costly supports sooner than that, and there is always the danger of propping up zombie companies with no prospect of survival. Yet, without the supports, there is every chance of more travel agents going to the wall in the next 12 months. Tough decisions lie ahead.