PWC offers gloomy view of hospitality sector

PWC's latest analysis of corporate insolvencies shows a 14% increase in hotels and travel and tourism businesses collapsing.

PWC reports business failures in hospitality sector
PWC reports business failures in hospitality sector

A total of 325 hotels have become insolvent in the past two years, including 95 in the first half of 2012. This compares to 90 in the same period last year.

Meanwhile, a total of 27 companies in the travel and tourism sector were hit with insolvency in the first half of 2012, up from 17 in 2011.

Worst hit

However, restaurants were the worst hit in the first two quarters of 2012, with 378 businesses becoming insolvent.

London saw the highest number of restaurant insolvencies in quarter two 2012, when compared to other regions, at 56. London alone has seen 432 restaurant insolvencies since quarter three 2010.

Recessionary pressures

PWC hospitality and leisure leader Robert Milburn said: "Only time will tell if hospitality and leisure insolvencies reached their peak in the first quarter of 2012 and are now on the decline."

He added that "recessionary pressures" were expected to continue over the next 12 months.

Olympics effect

British Hospitality Association spokesman Miles Quest told C&IT that "this has been a very strange year, certainly for London".

Quest added that the effect of the London 2012 Olympic Games on booking patterns could have contributed to the poor figures.

"The Olympic Games has really upset all the normal booking patterns," he said. "But I think come September and October one would hope and expect that the business pattern would swing back into action and there would be much stronger business and corporate demand in London and throughout the UK."

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