Following steep drops in business travel and increasingly tougher competition from the likes of Airbnb, the number of UK hotel insolvencies jumped by 60% over the year to September 2019.
Insolvencies in the hotel sector have now reached a 5 year high, with 144 individual sites directly affected. This is a sharp rise from the 90 already affected earlier in 2019, according to figures from the accountancy group UHY Hacker Young.
What has caused this?
A number of factors has led to the increase in hotel insolvencies. One of the biggest factors is that the hospitality sector has been suffering from a slowdown across the UK as businesses have been cutting their spending on expensive awaydays and conferences.
Tourists visiting Britain were also on the decline last year, falling by as much as 3%. Any hotels looking to take advantage of those staying in the UK for their holiday instead, have to compete with online booking platforms, who often offer cheaper prices.
Many hotels have been forced to lower their prices in an effort to gain back customers, even though many in the sector were already having to cope with rising costs – such as higher business rates, a rising minimum wage, and more expensive food and drink imports due to the weaker pound.
Many hotels have been unable to fund changes to how they operate, and are quickly being left behind. A lot of them will need to step up their use of technology in order to get up to speed with competitors like Airbnb, who have already increased their market share.
How we can help you
At Clarke Bell, we help directors whose companies are going through financial difficulties.
By getting professional help and expert advice as soon as possible, you will be giving yourself more options on how you can deal with your company’s cash flow problems.
Speak to us today for your free and confidential advice, on 0161 907 4044.