The UK travel industry has been rocked by a series of high-profile uk travel firm collapses in 2025, leaving thousands of holidaymakers stranded and highlighting the fragile state of Britain’s tourism sector. The latest casualty, Great Little Escapes, ceased operations in June 2025, adding to a growing list of travel firms that have buckled under financial pressure in recent years.
Recent Travel Company Failures Send Shockwaves Through Industry
Great Little Escapes: The Latest Victim
Great Little Escapes LLP, a Berkshire-based travel company operating from Sandhurst, became the most recent addition to the uk travel firm collapses when it ceased operations in June 2025. The company, which traded under multiple names including Your Holidays, Tunisia First, and operated several websites such as themaldives.co.uk and yourholidays.co.uk, left thousands of customers facing cancelled summer holidays.
The Civil Aviation Authority (CAA) confirmed the company’s failure as an Air Travel Organiser’s Licence (ATOL) holder, stating they were “currently collating information from the company” and would provide updates as soon as possible. Affected customers have been advised not to submit compensation claims yet, as these will be rejected while investigations continue.
Jetline Travel: A Quarter-Century Legacy Ends
Earlier in 2025, the travel industry witnessed another significant collapse when Jetline Travel, a London-based firm operating for 25 years, entered administration in March. The company, which also operated under names including Bargain Late Holidays and Cruise and More, affected approximately 5,000 customers and put 800 forward bookings at risk.
Founded in 2000, Jetline Travel had built a reputation as a prominent cruise and package holiday provider, taking hundreds of thousands of people on holidays during its quarter-century of operation. The company’s failure left 20 customers stranded overseas and resulted in the cancellation of numerous bookings with popular cruise lines including Princess, Cunard, and Holland America.
Felix Holidays: Fraudulent Practices Exposed
The travel industry’s troubles extended beyond simple financial failures when Felix Travels and Tours Limited was shut down in July 2024 following investigations by the Insolvency Service. The company, which traded under the Felix Holidays banner, owed customers almost £600,000 in refunds when it went into liquidation.
Investigations revealed that Felix Holidays Group Limited, connected to the failed travel agency, had claimed to be dormant since 2020 while actually spending over £200,000 using American Express cards for payments to airlines, hotel booking agencies, and high-value designer goods including luxury watches. Nearly 300 holidaymakers were left out of pocket, with many not receiving the holidays they had paid for.
Understanding the Scale of the Crisis
Financial Distress Across the Sector
Research by Plimsoll Analysis reveals that one-third of UK travel firms are currently at financial risk, displaying signs of declining profitability and rising debt levels. The analysis indicates that while top-performing companies are strengthening their market positions, struggling firms are becoming acquisition targets as the industry consolidates.
The broader UK business environment reflects these challenges, with company insolvencies reaching concerning levels. In 2024, there were 23,872 registered company insolvencies in England and Wales, representing one in 191 companies entering insolvency. While this figure was 5% lower than 2023’s record high, it remained at levels comparable to the 2008-09 recession.
Post-Pandemic Recovery Challenges
The uk travel firm collapses continue to reflect the lasting effects of the COVID-19 pandemic, which devastated the sector between 2020 and 2022. Inbound flight arrivals to the UK dropped by 90% year-on-year in 2020, hotel occupancy fell significantly, and the sector was completely closed for at least six months.
While the government’s Tourism Recovery Plan aimed to restore domestic overnight trip volume and spend to 2019 levels by the end of 2022, and inbound visitor numbers by the end of 2023, many smaller operators have struggled to achieve sustainable recovery. The plan’s ambitious goals of building a more “resilient, sustainable, inclusive and innovative” industry have proven challenging for cash-strapped businesses.
Why Are UK Travel Firms Failing?
Economic Pressures and Rising Costs
The travel industry faces mounting economic pressures that have pushed many firms to the brink of collapse. Corporate travel costs are expected to rise by 5-7% in 2025, driven by inflation and supply chain issues affecting the travel sector. These rising costs, combined with reduced consumer spending due to the cost-of-living crisis, have created a perfect storm for travel companies.
The UK tourism sector has lost more than £2.2 billion worth of exports as international visitors’ spending declined by 5.3% below pre-pandemic levels in 2024. Additional costs including the Electronic Travel Authorization (ETA) system, increased Air Passenger Duty, and higher employer National Insurance Contributions have further strained the industry.
Technological Disruption and Changing Consumer Behavior
The rise of online travel agencies and digital platforms has fundamentally altered consumer behavior, with travelers increasingly turning to websites like Expedia, Booking.com, and Airbnb for their travel needs. Traditional travel agencies with large networks of high-street agents have struggled to compete with these more agile and tech-savvy competitors.
Thomas Cook’s 2019 collapse serves as a stark reminder of what happens when established travel companies fail to adapt to digital transformation. The 178-year-old company’s inability to respond quickly to changing market dynamics and its substantial debt burden of £1.1 billion ultimately led to its demise, stranding 600,000 travelers worldwide.
Debt Burdens and Financial Mismanagement
Many failed travel companies have been weighed down by unsustainable debt levels accumulated through ill-advised mergers and acquisitions. Thomas Cook’s financial troubles, for example, began with a disastrous 2007 merger that created a debt burden the company could never escape.
Poor financial management practices, including paying dividends during periods of financial distress, have exacerbated these problems. Companies have often used customer funds as working capital rather than placing them in protected accounts, leaving consumers vulnerable when firms collapse.
Consumer Protection: What Happens When Travel Companies Fail?
ATOL Protection: The UK’s Safety Net
The Air Travel Organiser’s Licence (ATOL) scheme, managed by the UK Civil Aviation Authority, provides crucial protection for travelers when ATOL-licensed companies fail. ATOL protection covers package holidays that include flights and ensures that if a travel company goes bust, customers can either receive refunds or continue their holidays under alternative arrangements.
Since 2000, ATOL has helped 242,000 stranded holidaymakers return home and processed 1.7 million claims for future bookings impacted by company failures. The scheme covers situations both before travel (providing refunds) and during holidays (ensuring safe return to the UK).
However, ATOL protection has limitations. It only covers flight-inclusive packages and bookings made directly with ATOL-licensed companies. Customers who book through travel agents must ensure they receive an ATOL certificate specifying the licensed operator to be protected.
Alternative Protection Schemes
For holidays that don’t include flights, ABTA (Association of British Travel Agents) provides alternative protection through a bonding system established in 2001. The current wave of uk travel firm collapses has highlighted the importance of these protection schemes for consumers. This system requires members to maintain bonds equal to 15% of their projected annual turnover to protect UK consumers.
Credit card purchases offer additional protection under the federal Fair Credit Billing Act, which grants consumers the right to dispute charges when services are not provided. Many credit cards also carry automatic travel insurance and protections for disrupted trips, provided the card was used to purchase travel arrangements.
Travel Insurance Considerations
Travel insurance can provide additional protection against supplier failures, but policies vary significantly in their coverage. Some comprehensive policies will reimburse travelers for trip cancellation or interruption due to bankruptcy or financial default of travel suppliers, but many exclude coverage when booking intermediaries fail.
Travelers should purchase insurance within 10-21 days of making initial trip payments to activate financial default coverage, and claims typically cannot be filed until 10-14 days after purchasing the policy. Importantly, protection policies sold by travel companies themselves will not cover customers if those same companies fail.
How to Protect Yourself from Travel Company Collapses
Due Diligence Before Booking
Travelers should thoroughly research travel companies before making bookings, checking for proper licensing and industry accreditation. Companies should have verifiable business addresses, phone numbers, and customer support systems. Independent reviews on platforms like Trustpilot, TripAdvisor, or Google can provide valuable insights into company reliability.
Warning signs include vague deals, significantly under-priced offerings, urgent pressure to book, and companies that haven’t been formally accredited with leading industry bodies. The recent pattern of uk travel firm collapses has highlighted the risks of booking with companies that lack proper accreditation.
Payment Methods and Timing
Using credit cards for travel bookings provides the strongest consumer protection, as credit card purchases are protected under consumer legislation and many cards offer automatic travel insurance. Travelers should avoid using debit cards or making large advance payments to companies without proper protection schemes.
For maximum protection, travelers should purchase comprehensive travel insurance that includes supplier default coverage within the specified timeframe after booking. This insurance should be third-party coverage, not policies sold by the travel company itself.
Understanding Your Rights
When a travel company fails, affected customers should immediately check their booking documentation for ATOL certificates or other protection scheme details. If protected under ATOL, customers should follow instructions published on the CAA website and avoid submitting premature claims.
For unprotected bookings, customers should contact their credit card companies to dispute charges, check with airlines and hotels directly about existing reservations, and consider claims through travel insurance policies. In cases of company administration or liquidation, customers may need to submit claims to appointed insolvency practitioners.
Industry Response and Future Outlook
Government and Regulatory Action
The UK government has acknowledged the challenges facing the travel industry and has taken steps to strengthen consumer protection. New enforcement powers granted to regulators allow for significant fines to encourage better compliance with consumer protection law, representing what the Competition and Markets Authority CEO called “a watershed moment” in consumer protection.
However, industry leaders argue that more support is needed in light of the ongoing uk travel firm collapses. The World Travel & Tourism Council has warned that £60 billion is at risk over the next 10 years in lost tourism business, with the UK losing ground to European competitors who place travel and tourism at the heart of government decision-making.
Industry Consolidation and Adaptation
The current crisis is driving consolidation within the UK travel industry, with financially stable companies acquiring struggling competitors to expand market share. This consolidation may ultimately lead to a more resilient industry structure, though it reduces competition and choice for consumers.
Surviving companies are focusing on digital transformation, improved financial management, and enhanced customer service to differentiate themselves from failed competitors. The industry is also exploring new business models that provide better consumer protection while maintaining profitability.
Conclusion: Navigating an Uncertain Future
The wave of uk travel firm collapses affecting the UK represents more than isolated business failures – it reflects fundamental challenges facing the entire travel industry. Economic pressures, technological disruption, changing consumer behavior, and the lasting effects of the pandemic have created an environment where even established companies struggle to survive.
For consumers, the key to protection lies in understanding available safeguards, choosing reputable operators, and using appropriate payment methods. While schemes like ATOL provide valuable protection, they have limitations that travelers must understand.
The industry’s future will likely feature fewer but potentially stronger operators, enhanced consumer protection measures, and continued emphasis on digital innovation. However, the human cost of these failures – thousands of ruined holidays, lost jobs, and financial hardship – serves as a stark reminder of the need for sustainable business practices and robust consumer protection in the travel sector.
As the UK travel industry continues to evolve, both businesses and consumers must adapt to new realities while working together to rebuild confidence in a sector that remains vital to the UK economy and quality of life.
