Restaurant and hotel insolvencies to soar after summer
The number of insolvencies in the travel, leisure and tourism (TLT) sector has dropped by 50 per cent, although experts warn an increase may come after the summer trading ends.
Advisory firm KPMG has predicted that the ‘unusual’ drop in the average number of TLT insolvencies from 350 a month to 178 is not a sign of an upturn in the economic situation, rather a ‘temporary reprieve in advance of a second wave of insolvencies’.
Richard Hathaway, head of TLT at KPMG, said hotels and restaurants have suffered the most in the leisure sector, and the next quarter will be the most crucial yet for them.
“Their hopes for the summer months will rest on people choosing to holiday in the UK, or stay at home and spend more of their leisure pound on meals out and local entertainment,” he said. “The period between summer and Christmas is traditionally slower and this year will pose even more challenges than normal, so making the most of summer trading will be paramount.”
KPMG predicted the total number of insolvencies for 2009 to reach 5000, and although at half way through the year this figure has only reached 1571, it is expected to soar after the summer.
