Collinson Group Faces Challenges Ahead of Inheritance Tax Changes

The Collinson Group, a prominent player in the airport lounge industry, is experiencing significant growth, with revenues projected to reach £2 billion this year. This figure marks an increase from £1.8 billion in the previous year. The surge in demand has been primarily driven by its well-established lounge services and travel experiences.

David Evans, head of strategy and investments at Collinson, emphasised that the firm is dealing with rising demand at various major international airports, including Heathrow and Gatwick. The increasing popularity of luxury lounges has attracted customers both from airline loyalty programmes and credit card benefits. These lounges offer affluent travellers a more comfortable experience during their wait times. Despite the high demand, many travellers are left disappointed due to a lack of available seating.

In response to the situation, Collinson is expanding its lounge network. The company operates a collection of 1,800 lounges and has seen usage figures rise by 60 per cent compared to 2019. The impressive growth in this sector showcases thevalueof lounge access and associated travel benefits as appealing perks for credit card holders.

However, the upcoming changes in inheritance tax could pose significant risks for the business. Starting from April, the government’s tax policies could create substantial liabilities for family-owned firms transferring ownership to the next generation. David Evans expressed concern that the changes might force the company to consider bringing in outside equity partners, potentially impacting its independence and future strategies.

Such changes could undermine the long-term plans of family-run businesses like Collinson, which aims to remain a multigenerational company. Evans noted that transferring ownership without facing exorbitant tax liabilities is crucial to preserving the business’s identity and values.

As the landscape of the airport lounge industry continues to evolve, Collinson must navigate both market demand and the implications of new tax policies. This balancing act will be essential for sustaining growth while honouring its commitment to family-run business principles.