Autumn 'critical time' for hotels

This autumn will be a 'critical period' in the future success of the UK's hotel companies, KPMG ​has warned as summer leisure spend drops off and business from corporate accounts remains slow.

Richard Hathaway, KPMG's head of travel, leisure and tourism urged hoteliers to keep a 'tight rein' on costs over the next quarter to keep business solvent before the Christmas season.

He said: "Given the rough ride the hotel sector has endured in the last 12 months, the summer will have provided a life line for many struggling businesses, but as leisure spend drops off through the autumn, the next three months could be make or break.

“Many will find that the their traditionally strong autumn and Christmas revenues from business travel, conferences and events does not return this year and as a result their businesses will remain under severe pressure for the foreseeable future.Indeed recent research indicates that the sector is not expecting an increase in conference and meeting bookings in the coming year."

Hathaway said his company was expecting to see a surge in business insolvencies this autumn with 'the hotel sector unlikely to be an exception' and urged hotel owners and brand and management companies to be as flexible and co-operative with each other as possible.

"Tensions between individual hotel owners and the big brands have never been so pronounced as the pressure on cash and funding heightens their differing priorities," he said.

"Capital expenditure is a particular pressure point, with a need to find a balance between the long term need to maintain standards and on the short term need to keep servicing debt. This will require considerable flexibility and co-operation or the consequences could be severe for both sections of the industry."