Study suggests large number of hospitality businesses are at high risk of insolvency
A comprehensive tracking report recently published by insolvency trade body R3 has found that restaurants and other businesses in the hospitality sector are currently at a high risk of insolvency in certain regions of the UK.
According to the study, as many as 30 per cent of tourism and hospitality companies in the West Midlands are at an ‘above average risk’ of insolvency, while more than one in three (36.5 per cent) of restaurants in the East Midlands are running a similar risk of business failure.
Further north, the report suggests that hospitality firms are far stronger, with hotels and tourism businesses at the lowest risk of failure out of any sector in North West England.
However, in this region, more than a third (34 per cent) of transport and haulage firms have been identified as being ‘at serious risk’, while as many as 32 per cent of IT companies are at risk of business failure, the report suggests.
As a whole, R3’s report concludes that there is “mixed commercial picture” across the UK.
However, commentators have warned that “there is certainly no room for complacency” across all sectors – particularly with the new tax year upon us and unfavourable reforms to business rates putting additional pressure on many organisations.
A separate study carried out ahead of the business rates reforms, which took effect at the beginning of this month, found that 70,000 businesses in the City of London alone were ‘ill-prepared’ for the change and entered the new tax year in a state of ‘financial distress’.