Nearly 2,000 UK hotel companies could go bust over the next three years as a result of the Brexit vote, according to new research from accountancy firm Moore Stephens.
The accountancy firm predicts 1,800 UK hotel companies have at least a 30 per cent chance of going insolvent within the next three years as food and beverage imports are set to get more expensive.
The introduction of the living wage will also add to the hotel industry's woes. The study suggests that many hotel workers are over the age of 25, and so the living wage affects almost half of the hospitality workforce.
Other factors that could add to hotels' financial strain include competition from Airbnb and the popularity of budget hotel chains such as Premier.
Jeremy Willmont, head of restructuring and insolvency at Moore Stephens, says: “Greater costs across the board as a result of the Brexit vote and competition from Airbnb are putting some hotels at risk of insolvency.
“The drop in the pound, and the increase in staycations since the Brexit vote has the potential to be a boon for the hotel industry, with more foreign tourists choosing to visit the UK. However, the benefits have yet to reach hotel companies right across the country.
“Much of the hotel business in the UK comes from overseas tourists and those travelling for leisure. In order to combat any loss from the business sector, hotels should look to attract more custom from tourism, particularly those higher spending foreign tourists, such as Americans and Europeans.”
In December, Moore Stephens pointed out over 5,500 restaurant companies have a 30 per cent chance of going bust by the end of 2019.