Hotels Look Set to Struggle

The hospitality sector is facing a tough year as insolvencies in this area are set to rise.  This is due to the recent cold snap throughout the country and poor economic conditions according to John Alexander, a partner at accountancy firm Carter Backer Winter in a recent interview with Caterer magazine.  He had said there will be a rise in business failures amongst the various hotel chains in this country.

Alexander has stated that the bad weather is likely to have caused far lower income than would have been expected over the Christmas period, when hotels usually show their best figures and it is likely that many hotels would have been counting on the increase in sales over that period in order to continue profitability.

It is thought that insolvencies in hotels may rise to over 40 in the first quarter of this year compared to just 31 last year, this could represent a rise of around 33% if it proves to be correct which would be a very substantial rise.  Alexander also indicated that he expects the rise to continue throughout the year with no sign of recovery until 2011 at the earliest.

Adding to these fears is the end of government support schemes for businesses, which is promising to increase commercial insolvencies anyway before the further bad spell that the hospitality sector has been through.

Posted at 11:46AM Feb 12, 2010 by Marc Stenton in Insolvency  |  Comments[0]