UK hotels are in for a “rough ride” for the remainder of the year, after insolvencies soared 200% in the first quarter of the year.

Figures from consultancy firm PricewaterhouseCoopers show that nearly 200% more hotel companies became insolvent in the first quarter of 2009 than in the same quarter a year ago.

Insolvencies in the first quarter of the year also showed a 20% rise compared with the fourth quarter of 2008.

Stephen Broome, director at PricewaterhouseCoopers, said many hotel groups were hopeful of survival through to the summer “when all revenues are pinned on the revival of demand from domestic holiday visitors”.

But a consumer poll taken over the Easter holidays showed that consumers are increasingly looking to other forms of accommodation than hotels to save money, with a 12% rise in those choosing to go camping, caravanning or to a holiday park.

“It is likely that many of those who remain in the UK over the summer will opt for self-catering, camping, caravanning, holiday parks and visiting relatives, rather than staying in hotels,” said Broome.

“While current exchange rates should encourage travellers from abroad to visit and may mitigate some of the effects of a post budget fall in consumer confidence, the prospect of a warm and sunny British summer is unlikely to provide much shelter from the storm for hotels, whatever the weather.”

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By Gemma Sharkey

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