Lowcost Travel Group ceased trading on July 15. While the online travel agent had a sizable presence in the UK, it is actually headquartered in Palma de Mallorca, Spain. At the time of its shutdown, it had 27,000 customers overseas and 110,000 forward bookings. (Bankruptcy) administrators have been appointed, a notice has been posted on the company’s website, and a total of 451 staff have been laid off.
The closure was not necessarily a surprise. In 2013 the CAA issued a statement warning consumers to be cautious about booking with the company. It came after the online travel agency announced it was moving its base from London to Spain and would therefore no longer be required to offer consumer protection guarantees required of UK travel providers. Also, last September, the company laid off staff as it centralized core functions to new offices in Poland to drive cost efficiencies and maximize profits. It moved its marketing, IT, sales, aviation and customer services divisions to Krakow.
Sources told Travel Weekly UK the week before the shutdown that Lowcost had been due to receive extra funding towards the end of last year, but that it didn’t materialized, resulting in the layoff of a number of senior level staff.
Also, the Irish travel trade publication Travel Extra said on July 17 that Irish travel agents had been reporting that clients have been turned away at hotels where they have been booked in recent weeks because of unpaid bills. An advertising campaign offering supposed savings of 60 percent had also driven consumer sales in recent weeks. Just prior to this move, a proposed restructuring of the Irish operation led to the departure of Grainne Caffrey to Sunway.