Analysis of more than 2.2 million UK business records showed that the average credit rating of people in the travel industry hit a new low this autumn and, unsurprisingly, the sector has seen the worst of all during the pandemic.
Credit rating analyst Experian’s report found the average score of the 9,038 travel companies it examined – which included agencies, operators and other booking services – fell to a low of 30.5 in September 2021, a decrease of 30.7% compared to March 2020. .
Experian claims that a corporate credit score is the measure of a company’s creditworthiness, which is made up of a number of factors, and is intended to indicate the financial position of the organization and its level of financial risk. . According to its Business Credit Index, a score between 26 and 50 means an organization’s financial condition is “above average risk.”
The overall average credit score of the 2.2 million UK business records analyzed by Experian in September had returned to the pre-pandemic average of 44, down from an average score of 40 for most of the pandemic.
Experian said Britain’s retail sector had “shown resilience”, rising 19.2% to 31 and leaving travel bottom of the rankings, while manufacturing emerged with an average credit rating of 57 – up from 55.9 a year ago – which is considered “below average”. risk’.
The automotive sector has an average score of 49 and the advertising and market research sector a score of 32.
The report notes that travel businesses are expected to “continue to struggle” and that the sector has not benefited from the recovery in credit ratings seen in most others, where ratings have reached pre-pandemic levels “in a much shorter period of time than it took for them to fall”.
James McGarva, Managing Director of Trade Information Services at Experian, said: “Despite the continued pressures presented not only by the impact of Covid-19, but also other well-documented macroeconomic pressures such as labor shortages, workforce and global supply chain issues, companies’ ability to adapt has been impressive.
He added: “By looking at business credit ratings nationwide, we can see how much the financial situation of businesses is improving, presenting less risk to lenders and improving their chances of accessing finance. they need to thrive.
Despite the improving picture of the wider economy, travel businesses have been hit by the latest round of travel restrictions introduced following the spread of the Covid-19 Omicron variant.
Many travel industry organizations have expressed dismay at the reintroduction of PCR testing on arrival in the UK and testing before traveling to the UK, with ABTA among those calling for further support finance for the sector.