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Bars hard-hit as administrations in hotel and licensed sector rise sharply

04 November 2011 by
Bars hard-hit as administrations in hotel and licensed sector rise sharply

Bars have been particularly badly hit by a sharp rise in the number of administrations in the hotel, restaurants and licensed trade sector.

The number of businesses in the hotel, restaurant and licensed trade that fell into administration in the third quarter of 2011 compared with the quarter before has risen 33%.

Meanwhile, the sector also saw a 26% rise on the same period a year ago.

Insolvencies in the bars sector were up 63% year-on-year, while they were up 55% for hotels. But the restaurant sector saw a fall insolvencies, dropping 17%.

Commenting on the figures Peter Cooper, partner at Baker Tilly Restructuring and Recovery, said: "The latest insolvency statistics for the hotel and licensed sectors support our previous predictions. Challenging trading conditions have translated into a significant number of bar, nightclub, restaurant and hotel insolvencies in Q3, with wet-led pubs and bars being particularly badly hit. As expected, there is some regional variation, with the London markets holding up better than the provinces.

"As Christmas approaches and the prospects for a full scale economic recovery become less certain, the key issues for the sector will continue to centre around consumer confidence and spending power, restricted working capital availability and, as a consequence, the threat that businesses will not be able to absorb the impact of unforeseen events such as adverse weather. This may well lead to a greater number of insolvencies in Q4 2011 and Q1 2012."

Andrew Davis's Llangoed Hall goes into administration >>

Nightclub operator Luminar enters administration >>

Cafe & Tapas enters administration >>

By Neil Gerrard

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