Travel companies have been warned not to rely on public sector work to keep their businesses profitable.
A study by accountancy firm Wilkins Kennedy has found that the number of government suppliers going bust has increased by nearly 50%.
Anthony Clark, a director at the Kent-based company, said: "So far, the impact of the Government's austerity drive has been most visible in the slew of profit warnings from listed companies.
"Whilst the real cost-cutting has yet to take place we are already seeing a wide range of companies fail because of delayed contracts."
The report found that 168 businesses supplying goods and services to the public sector went bust in the first half of 2010, compared to 114 in the first six months of the previous year.
The majority of failures were in the health and social services, education and defense sector.
In contrast, the number of insolvencies during the same period has decreased overall by 5%.
However, Andrew Burnham, head of travel at accountancy firm Macintyre Hudson, has advised the travel industry not to panic.
Speaking to ABTN last week he said public sector spending cuts were unlikely to affect the green shoots recently seen in business travel.
"My view is that we've had the corporate recession," he said.
"The private sector has taken the pain, realigned itself, and it is in better shape and, I think, showing some fighting spirit and coming back this year.
"Where the deterioration will occur will be in the public sector. Inefficiency will be removed, which will affect leisure travel. Probably volume leisure rather than the quality end of the leisure market," said Burnham.
The news comes as Carlson Wagonlit announced it has been reappointed as a government travel provider, with a four-year contract.
Nigel Turner, director of public sector and industry affairs at CWT UK, said: "Effective management of travel to drive cost savings is the paramount priority for our public sector customers and we will continue our partnership approach to achieve these goals."
The travel management company was last month named as Overall Supplier of the Year by the Home Office, and was awarded Best Contribution to a Project or Programme at the annual Home Office Supplier Value and Innovation Awards.
BSI has also been given a four-year government contract, to provide accommodation and conference booking services.
Trevor Elswood, BSI's managing director, said the company aims to deliver savings through "convergence across the two spend categories".
He said: "Despite being a cost effective service provider for hotel bookings, BSI's track record of consistently delivering baseline savings of between 20-40% on new accommodation and conference client implementations far outweighs any savings achieved from lower agency fee costs."
www.carlsonwagonlit.co.uk www.macintyrehudson.co.uk www.wilkinskennedy.com www.bsi.co.uk