Scotland's hotel and restaurant liquidations trebled in the first three months of this year compared with the same period last year, according to latest figures.
The quarterly insolvency statistics, published by the Department of Trade and Industry, show there were 18 company liquidations in the Scottish hospitality sector, compared with six last year. There were 23 for the whole of last year.
The liquidations are in line with a dramatic increase in failures in the rest of the Scottish economy. Across all sectors, the number of liquidations in the first three months of the year rose by 44.6% on last year.
Liquidators were appointed to 240 companies, comprising 170 compulsory liquidations and 70 creditors' voluntary liquidations.
By contrast, the figures for all sectors in England and Wales revealed only a small increase of 1.5% from 3,676 last year, to 3,731 this year.
Matt Henderson, Scottish chairman of R3, the Association of Business Recovery Professionals, said: "There are a number of factors at play here. There is less tourism after foot-and-mouth disease and 11 September but there is also a reduction in confidence which is likely to inhibit investment in this sector.
"Hotels and restaurants generally require continued investment to upgrade and maintain their premises, and if the economy suffers, investment is likely to dry up.
"Equally, a less confident economy means that corporate entertainment is likely to be the first thing to go as companies tighten their belts."
by Colin Wright
Source: Caterer & Hotelkeeper magazine, 16 - 22 May 2002