The number of hotel firms going bust jumped last year by 61%, accountancy firm Wilkins Kennedy has said as the benefits of the weak pound and the ‘staycation’ summer were offset by the slump in business travel.
Hotel chains to go under last year included McKever Hotels, Folio, the Real Hotel Group, Comfort Inn, Quality Hotel and Purple Hotels.
The report said that despite the weak pound and many people holidaying at home, the hospitality sector remained weak.
Anthony Cork of Wilkins Kennedy, said that the insolvency rate in the sector was a reflection of the tightening of corporate budgets, leading to:
“A massive curtailing of business trips, conferences and teambuilding events … Staycations and the weak pound might have helped to increase the number of visitors during the holiday periods, but unfortunately this hasn’t translated into the increased spending that hotel owners had hoped for as customers cut back on their length of stay and extras.”
Mr Cork also warned that there is also a shift in the business sector away from meetings and conferences towards:
“Video-conferencing and other new forms of communication rather than face-to-face meetings”
The news of a slump in hotel usage by the corporate sector will be a cause for concern to the Eastleigh council taxpayers who are opposed to the building of a luxury hotel at the Rose Bowl by Eastleigh Borough Council
The council have borrowed £32million to fund the 4-star resort hotel containing a luxury spa as well as major conferencing facilities – after banks decided it was too risky.
A group of local hoteliers are fighting the plan which they say threatens their businesses.
Speaking last November, hotelier Moez Mohamed told the BBC:
“The council has not had proper regard to the financial risks and the current economic realities, and instead appears to be proceeding on the basis that there is no risk whatsoever to the local tax payers.”
Do you still think the funding of a luxury hotel by local taxpayers is a good idea?