Hotels hardest hit by insolvencies in 2009
A lack of corporate customers has rocked independent provincial hotels, as it was revealed that insolvencies in the hotel sector have rocketed.
New figures from PricewaterhouseCoopers (PWC) show that the rate at which companies became insolvent fell across all sectors in the fourth quarter of 2009, apart from hospitality and leisure, where there was a 12% rise.
The trend was driven by hotels, with a 68% increase in insolvencies between the third and fourth quarter 2009, and a 31% increase year on year.
The news came just weeks after Gravetye Manor, the three-AA-red-star, three-AA-rosette country house hotel near East Grinstead in West Sussex, called in the administrators.
Hotels tend to lag behind pubs and restaurants in a recession because of their reliance on advanced bookings, PWC said. And it warned that insolvencies may continue in the first quarter of this year.
David Chubb, partner, PricewaterhouseCoopers, said:
"Individual hotels based in the provinces and not affiliated with a major brand have continued to suffer from poor occupancy and low rates. We expect this to continue into 2010.
"Despite the spending cutbacks in both the corporate and leisure sectors, London remains a must-see destination for both UK and global travellers benefitting from the weak pound. However the regional market which relies more heavily on corporate activity is feeling the full force of the recession."
He added that consumers opting for staycations and camping holidays had also hit regional hotels hard.
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By Neil Gerrard
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