‘Experience economy’ boosts Yorkshire’s hospitality sector
Hotels in Yorkshire are showing resilience according to the latest research by insolvency and restructuring trade body R3, which reveals that the region has started to rally with the proportion of hotels at higher than normal risk of insolvency now close to the average across the UK.
After creeping rises in the proportion of hotels in Yorkshire in the overall negative band over the last eight months, June saw the first month-on-month fall since September last year. The sector now has 31.6% of hotels at higher than normal risk regionally, only slightly above the national figure of 31%. Of the 677 active hotels in Yorkshire, 214 are identified as being at higher than normal risk.
Many of the other 11 regions surveyed across England, Wales, Scotland and Northern Ireland, put in considerably weaker performances with the South West (38.8%), the East Midlands (37%) and Scotland (35.6%) the parts of the UK with the highest proportions of hotels at greater than normal risk of insolvency.
Looking at other parts of the hospitality sector, Yorkshire pubs performed more strongly than the national average with just 31.5% at higher than normal risk compared with 33% across the UK; and restaurants also compared well with 31.6% in the overall negative band regionally, below the national figure of 32.5%.
Eleanor Temple, chair of R3 in Yorkshire and a barrister at Kings Chambers in Leeds, commented: “The hospitality sector’s risk levels are steadying, possibly helped by falling inflation easing pressure on consumers’ pay packets . It’s been a tough time for the region’s hotels so it’s good news that we’re seeing levels of distress starting to level off after months of rises.
“While the retail sector has been suffering, there is much talk of the ‘experience economy’ as people choose to spend on leisure activities rather than on clothes and furniture which, of course, is likely to benefit the region’s hotels, restaurants and pubs.”
R3 uses research compiled from Bureau van Dijk’s ‘Fame’ database of company information to track the number of businesses in key regional sectors that have a heightened risk of entering insolvency in the next year.