Apr

18

SterlingA couple of days ago a tour operator called Conquest Vacations failed. From one day to the next the doors were closed and they filed for bankruptcy. Their vacationing, and about to be vacationing clients, and travel agents for that matter, had no idea and did not see it coming. It turns out that a cash crunch killed them. Credit card companies have recently changed their policies with tour operators, not forwarding them the funds until after the clients' vacations are done - for exactly the type of thing that just happened to Conquest. They are afraid of being stuck with some of the losses if a tour operator goes under. So tour operators now need to finance the flights and hotels and other tour costs in advance. Ouch.

So here we have another form credit tightening that leads to business failures that lead to job losses that lead to further credit tightening (through fear of companies failing) that leads to … companies failing etc… It makes you wonder to what extent we are out of the woods yet, if at all.


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