Levels of financial distress fell 4 per cent in the hotel and accommodation sector (down to 3,382 struggling companies) in the lead up to the EU referendum on 24 June, according to Begbies Traynor's Q2 Red Flag Alert research, showing that the sector was already healthy ahead of the busy summer season.
Coupled with Brexit triggering a weakening of the pound against the Euro, causing holidays in Europe to become more expensive, the UK's travel and tourism industries could benefit further as more Brits choose to holiday at home, said Julie Palmer, partner at Begbies Traynor.
“Despite the typically unpredictable British weather over the past three months, our data shows that levels of ‘significant’ financial distress actually decreased across all key sectors of the UK tourism industry in the lead up to the Brexit vote, suggesting the sector is in rude health ahead of its vital summer season," she said.
“Since then, while most sectors of the economy have started to batten down the hatches to wait for the Brexit storm to blow over, in contrast the UK’s domestic travel and tourism industry is expected to be one of the first sectors of the economy to see tangible financial benefits from the referendum result.
“The significantly weaker pound has already made international travel for British families so much more expensive, which should encourage more to favour staycations on home soil. Meanwhile currency fluctuations have also made travel to the UK from Europe and the US in particular more affordable, helping incoming tourists to get a lot more bang for their buck.”
Independent hotel group Best Western was one of the first to report an uplift in bookings from international tourists in the weeks following the EU referendum and was hoping to see more than the current 5 per cent rise from UK-based guests in the coming weeks.
Positivity across the hotel sector has not been echoed in the restaurant and pub sectors, however, with only 15 per cent of bosses in these industries feeling optimistic about prospects for the eating out and drinking market following Brexit.