Banks are still willing to lend

Banks have come under fire for not lending to hospitality operators, but Tony Burnell, relationship director for hotels and leisure at Lloyds TSB Corporate Markets, insists that funding is still there for the right businesses

The hospitality industry has had a tough few months and understandably there is nervousness about what the rest of 2009 will bring.

Hotels are facing uncertainty, and many have already taken the decision to cut rates in an effort to increase occupancy instead of standing firm.

If we want to see any signs of recovery, funding needs to be made available to well-managed hospitality operators to help them lead the industry out of recession.

While market conditions are considerably more challenging than a year ago, there are still deals to be done with those businesses that can demonstrate they have sound management structures in place.

From my perspective, this highlights the importance of relationship banking and the need for banks to take the time to gain a solid understanding of their customers' plans. We're looking to establish that our customers have a tight business plan and the right management skills in place.

The old saying, "turnover's vanity, profit sanity, but cash is king", is truer today than ever before. That's why getting cash in is all-important, and the best-prepared businesses will already have had tough conversations with their suppliers and clients alike to keep tight control on their working capital cycle.

What's more, in the current climate it's essential to have a plan B. This is where we can provide input and guidance based on our knowledge and experience to help senior management plan and implement realistic forecasts.

That's why I believe that businesses that emerge the strongest from the recession will be those that have the closest relationship with their bank.

This approach is paying off and, encouragingly, I have recently been involved in a substantial deal with a large chain of hotels and have a number of hospitality projects on my desk that I hope will come into fruition in 2009.

The success of the hospitality sector is hugely important to the UK economy, and we're just as keen as ever to continue supporting those operators with strong leadership and a clear vision.