Official statistics published by the Insolvency Service have revealed that the number of businesses appointing administrators in the sector fell by 35 per cent year-on-year in 2012.
Partner at Baker Tilly Restructing and Recovery LLP Tony Wright commented: “Official statistics published today by The Insolvency Service have revealed that the overall number of businesses appointing administrators in the hotel and licensed sector fell significantly, by 35 per cent year-on-year in 2012. This represents the lowest levels seen in the past five years.”
The figures show that the leisure sector responded well to the continued low interest rates and the fall in inflation. Falling unemployment rates and poor weather were seen as the reason for people returning to the comfort of bars and restaurants during the on-going economic climate.
Hotels and restaurants experienced the most substantial falls in the sector, with levels of administrator appointments falling 36 per cent and 41 per cent respectively in the past 12 months. The tourist influx as a result of the Olympic Games and the Queen’s Diamond Jubilee are believed to have been the reason for the sector’s additional income.
“The question for the industry going forwards is will this recovery be sustainable in the absence of these exceptional events in 2013,” Tony Wright continued.
“Although the sector appears to have rebounded, there is still caution in the air with worries surrounding the limited prospects for a full scale economic recovery and the Eurozone woes leaving many operators concerned for the next twelve months, especially given the number of well-known high-street names entering administration over the winter period.”