Hospitality business failures up again

22 November 2010 by
Hospitality business failures up again

Insolvencies within the hotel and leisure sector have continued to rise in recent months, despite an improving situation nationally.

According to the latest Insolvency Index from Experian, 127 leisure and hotel businesses went under in October, continuing a recent upward trend that saw 113 fail in September after 105 went under in August.

However, compared with the same period last year, October's 127 insolvencies represent an improvement over the 144 failures in 2009.

Nationally there were 1,635 insolvencies last month, which was a 17% improvement on the same period a year ago, when there were 1,976.

The latest Markit Household Finance Index (HFI) suggests consumers are increasingly reticent to spend after the recent government cuts and the threat of significant job losses in the public sector.

The index shows 29% of survey respondents have seen their finances worsen in November, with just 7% seeing an improvement. As a result the headline HFI (essentially the balance) was 38.9 for this month, down from 40 in October and the lowest score since August.

Tim Moore, economist at Markit, said: "With a fiscal squeeze hanging in the air, the November HFI data suggest that households are extremely concerned about the state of their current finances and the outlook for next year.

"This tends to be an accurate advance indicator of wider spending trends, so points to subdued consumer demand in the coming months."

Distressed asset sales and insolvencies signal slow recovery >>

Hotel and leisure insolvencies increase in September >>

How have independents around the UK responded to the recession? >>

<span class="Á"noindexÁ"">By Chris Druce

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