INSOLVENCIES in the hotels and leisure sector are now at their lowest point since the fourth quarter of 2010, signalling a pick-up in strength in the market.
Around 313 businesses – mainly bars and restaurants and hotels – collapsed in the first quarter of the year, according to accountancy firm PwC.
This was a 10 per cent fall on the fourth quarter of 2012 and down 27 per cent compared to the same quarter last year.
“Perhaps this is a sign that the remaining businesses have adapted to the current economic conditions in order to ensure their survival,” said David Chubb, a business recovery partner at PwC.
Restaurants saw the biggest fall in the number of insolvencies – down 13 per cent in the first quarter – but Chubb warned “it was difficult to read too much” into this quarter’s results.
“The challenge restaurants have going forward is how to pass on increasing food prices to the customer, especially as recessionary behaviours are now the norm and the focus on dining out clever has certainly stuck with the consumer,” he said.
In total, there were 1,794 insolvencies in the sector in the past 12 months compared to 1,816 in the year before.
Hotel insolvencies fell 17.4 per cent year-on-year.