Hotel failure rate falls but mood amongst operators remains gloomy

The latest Insolvency Index from Experian showed a marked improvement in the overall number of UK businesses going under and a corresponding improvement in the hotel and leisure market.

July saw 108 hotel and leisure businesses file for insolvency compared with 125 a year ago. This was against a nationwide backdrop that saw 1,542 UK businesses fail in July, 33 per cent fewer than the 2,312 insolvencies a year earlier.

Mark Firth, managing principal of PH, an Experian company, added: “July’s data indicates that the SME population is fairing much better in terms of insolvencies than it did this time last year.”

Gloomy outlook​

Despite this improvement, research by Markit for KPMG reveals a sizeable fall in optimism from the hotel and restaurant sectors about the coming year, although UK operators are more positive than their international counterparts.

Global activity expectations for hotels and restaurants were lowest among all the service sectors covered by the research, with only a net 23.9 per cent of respondents saying they were confident about the future.

It represents a nine percentage point decline on the previous quarter’s score in February 2010, and is well below the global average score of plus 43.9 percent in the latest survey.

Richard Hathaway, head of travel, leisure and tourism at KPMG, said: “Having borne the brunt of the fall-out from recession and as a typical bellwether of consumer spending, the global hotels and restaurants sector remains distinctly cautious.

“However, in the UK the situation is more positive in some areas, such as the larger branded restaurants and pubs who have managed to maintain relatively good sales levels compared with last year, through widespread money off promotions.”

Earlier this month it was revealed that the hospitality industry had been one of the hardest hit by the recession​.