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Number of hospitality insolvencies fall

By Becky Paskin , 27-May-2011

Business looks brighter for small restaurant, pub and hotel operators, with the number of insolvencies over the past year having fallen by almost 5 per cent.

According to Experian’s latest Insolvency Index, 123 small businesses in the leisure and hotel sector, which includes restaurants and pubs, became insolvent during April 2011 - a 4.65 per cent drop on April 2010.

But despite the drop there has been no change in the likelihood of business failures in the sector.

Experian’s “financial strength” score, which predicts the likelihood of insolvency in the coming 12 months, with a score of 100 being the least likely to fail, remains at 78.96.

Meanwhile, the brewing industry saw just one insolvency during April, a zero per cent change from last year, and scored a financial strength score of 77.81. The food retail sector saw 16 insolvencies for the month, a drop of 15.79 per cent on the previous year, scoring a financial strength of 74.95.

The property sector was hit hardest with a 70 per cent year-on-year increase in business failures during April (184).

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