Cash flow problems put Pontins into administration
Pontins is the latest household name to fall victim to recession and the credit crunch. They have been put into administration, meaning that the future of the company is uncertain, for both staff and customers. The problem is that the banks are no longer willing to give them credit – so although they have customers willing to buy, they face the possibility of business failure due to a lack of cash flow.
They have 3,000 bookings just for this weekend – which sounds pretty good for seaside holidays in the middle of November, although I have no idea what their capacity is. Last year they invested in a £50m plan to redevelop the centres and create 2,000 jobs, hoping to take advantage of recession and the weak pound would lead families to switch away from foreign holidays towards what became known as “staycations” (this may sound strangely familiar to those who attended the tutor2u revision workshops last year!). But the marketplace has been exceptionally competitive – the Independent quotes an expert at TravelSupermarket.com who says that holidays and breaks out of peak season “have often been sold at rock bottom rates, leaving companies with little room for healthy margins..” and apparently Butlins and Havens have been more successful at minimising their costs. This cannot have been helped by a change in consumer habits, reported earlier this year, to late bookings for customers waiting to see if they can get a lower price.
So far there are no plans for redundancies, and the holiday parks will stay open as normal – they have set up a helpline for customers who have made bookings and will wonder what happens next, which incurs an extra cost that can be ill-afforded at present, but must be necessary if they have any hope of retaining sales, while they hope to find a buyer.
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