Credit crunch hits travel company

By Dave Harvey
Business correspondent, BBC West

The company's closure has cost 23 staff their jobs

They promised "Brilliant Weekends". But now the Bristol-based travel firm of that name is talking to its bankers about bankruptcy.

The travel market is tight at the moment, but just weeks ago shareholders put their faith in the company, with a further investment of £300,000. So what tipped Brilliant Weekends over the edge?

"We were struggling against the high Euro", said Richard Dennis, the firm's founder and managing director, "and that makes holidays on the continent expensive."

The economic slowdown had also cut the number of people looking to splash out on trips such as a hen party in Prague, or a stag weekend in Barcelona.

But it was the credit card companies who pulled the plug.

Unwanted risk

"We got a call from our credit card company", Mr Dennis told the BBC. "They told us they were withdrawing their facilities, and with that news, we just had to pack up."

Ironically, credit card companies give customers security when firms fold.

People who have bought on plastic can get a refund from their credit card firm.

But this effectively means the credit card company itself is underwriting the travel firm.

"Whenever a firm goes bust, people are all over the media telling customers to get a refund from their credit card firm," said Mike Warburton, an analyst at the Bristol accountants Grant Thornton.

"But perversely what's happened here is the credit card companies have decided they don't want to take that risk, so they've withdrawn the facility.

"And the firm's gone under as a consequence."

This is a new twist to the "credit crunch".

And it leaves 23 staff without a job and hundreds of engaged couples with hen weekends and stag parties on the rocks.