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LESG collapse will not damage hospitality

05 October 2006

The administration of London and Edinburgh Swallow Group (LESG) will not have an adverse impact on the hotels sector and should be viewed as a "good thing", according to an industry expert.

There had been fears that the high-profile demise of LESG would lead to investors being more cautious about the hotels sector. But Rod Taylor, hotels team leader at Barclays, insisted the industry was resilient enough to cope.

He said the banks that had invested aggressively in LESG would be nursing their wounds, but predicted that its administration would have little long-term impact as the larger banks had been more conservative because of concerns over the group's business model.

Taylor added that, conversely, the hotels sector occasionally needs events such as the LESG administration and foot and mouth disease to ensure people "keep their feet on the ground".

"It is important for people in the industry to work through problems every now and then," he told Caterer. "It makes people stop, think and consider. The industry has always come out stronger after a crisis and finds new ways of working and reducing costs."

As Caterer went to press, LESG administrator Ernst & Young announced that a further six managed pubs and hotels had been closed with the loss of 120 jobs.

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Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

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