More than 100 delegates gathered at IBM’s London headquarters for the Travolution Start-up Summit 2018. Juliet Dennis reports
Red tape is “stifling” growth of travel start-up businesses in the UK, according to the boss of an investment firm.
Stewart Baird, chief executive of Stone Ventures, said there was a “computer says no” culture in the UK that made it harder for small start-ups to get off the ground compared with other countries.
Speaking during a debate at the first Travolution Start-Up Summit , Baird said: “If the Civil Aviation Authority puts too tight a control on small businesses, it will stifle them. I think the regulator is stifling growth.
“They see risk and the computer ‘says no’. If you are growing, you are a risk, so they put restrictions on them. It’s unhelpful.”
Travel start-ups applying for an Atol are required by the CAA to have a minimum £50,000 bond to trade. Bonding is necessary for the first four years’ trading but reduces annually.
In comparison, start-ups in France are encouraged, according to Morgann Lesné, partner at business consultancy Cambon Partners.
“The regulation [in France] is in favour of travel businesses in general. It’s a lot easier to set up a company,” he said.
Baird said if UK regulation were not relaxed, it would stop smaller firms emerging at the bottom of the business “food chain”.
“We have seen lots of big sales of businesses in the UK, but who’s feeding that chain, unless we get more businesses at the bottom?” he said.
Baird also raised fears of the knock-on effects of a “massive skills shortage” in the UK as a result of Brexit, with many companies relocating outside of the UK.
Stone Ventures has investments in 18 companies, three of which are in travel, and is looking to increase its foothold in the sector.