UK Hotel insolvencies Hit Record Levels
APRIL 27, 2009 - The number of hotel insolvencies in the first quarter rose by almost 20 percent on the previous quarter and by 188 percent on a year-on-year basis, according to new figures from PriceWaterhouseCoopers.
A total of 46 UK hotel businesses went into administrators between January to March. The biggest casualty was Real Hotel Company, although most of the group's 40 hotels have been bought from administration.
The parent group of Four Pillars fell into administration, with estimated debts of lb90 million. Its five freehold hotels are now being offered for sale by PwC.
Stephen Broome, director of hospitality and leisure for PwC, said the sector was "in for a rough ride over 2009" and he expected a mixture of both individual hotels and bigger groups to fall by the wayside.
He told The Times said: "Many hotel groups have seen the benefit of December trading, which, despite the downturn, will still have provided some Christmas cheer. With the quieter months of January and February now a distant memory, many UK hotels hope for survival through to the summer, when hopes are pinned on a revival of demand from domestic holiday visitors."
A consumer poll conducted by PwC over Easter showed that consumers are looking to other forms of accommodation to save money. The poll showed a 12 percent rise in those choosing to go camping, caravaning or to a holiday park.
Broome added: "While current exchange rates should encourage travellers from abroad to visit and may mitigate some of the effects of a post-Budget fall in consumer confidence, the prospect of a sunny summer is unlikely to provide much shelter from the storm for hotels."
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