The number of wind-up petitions made for hotels has almost doubled in a year and may “increase dramatically” in light of the pandemic, according to accountancy and business advisor Moore.
According to new data from the group, 13 petitions to wind-up hotels have been made by courts so far this year, against seven petitions made for the same period in 2019.
Hotels are currently protected by a moratorium on winding up petitions, though the number of petitions is expected to “rise sharply” when the moratorium ends on 30 June.
According to Moore, with social distancing measures likely to stay in place, problems for hotels will be “far from over” once measures are eased.
It added that changes enforced in light of the pandemic may have a longer-term financial impact on the sector, and consumers will have “significantly less” disposable income to spend on tourism.
It warned that lower levels of international travel will also see UK hotels lose out from higher spending US and Gulf based customers.
Chris Tate, business advisory director at Moore, said: “The hotel industry was already struggling as a result of Brexit-related uncertainty and coronavirus could be the final straw for many hotels.”
“There has been little indication on when hotels will be able to reopen. That needs to come soon. Those that are seasonally geared for a busy period in summer will be amongst the worst affected. If hotels miss out on key custom during July and August, this could have a disastrous impact on their finances.”
He added: “We’d expect to see a rise in insolvencies once Government protections to mitigate the impact of the outbreak are lifted, unless tenants and their creditors successfully negotiate payment plans.dited –
“Landlords will want to work with tenants to come to a viable solution, however, many will be reluctant to grant reductions in rent, which could negatively impact the value of their portfolio and lending provenance criteria.”