The leisure sector, which includes hotels and restaurants, is the only group predicted not to benefit from a fall in business failures this year, according to a new report from accountant BDO Stoy Hayward.
The report predicts that the overall number of firms collapsing in the UK will drop from 17,546 in 2003 to 16,358 this year. By 2006, overall business failures will average to 15,828.
But it warns that the leisure business – which covers hotels, licensed premises, restaurants, other catering, travel agents and recreational services – will see the number of predicted failures hit 1,263 by the end of the year, up from 1,120 in 2003.
The good news is that a slowdown in consumer spending may be offset by a revival in business travel and a recovery in overseas visitor numbers.
Although the forecast number of leisure businesses that fail will fall in following years – to 1,217 in 2005 and to 1,197 in 2006 – the failure rate will remain constant at 0.7% from 2004 to 2006.
by Angela Frewin
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