By Max Clarke
Although a narrowing trade deficit and falling unemployment may be the first sure signs of an economic recovery, one sector in particular continues to lag in the doldrums, showing ‘no discernable improvement over the past two years’; the hospitality and leisure sector (H&L).
The sector saw a total of 979 insolvencies for the year ending March 2011, compared to 994 the previous year.
"The latest insolvency figures for the H&L sector show no marked improvement year on year,” commented Robert Milburn- H&L leader at ‘big four’ business services firm PwC.
“This trend could continue as the spending cuts begin to impact the UK economy and with the new fiscal year starting, there are net personal tax rises for many. This will make people tighten their purse strings which will impact disposable income with a knock on effect on the hospitality and leisure sector."
Reductions in corporate entertaining, depressed consumer disposable income as a result of the recession have seen consumers cutting back on socialising and eating out.
As a result, pubs and restaurants have been worst hit in the first quarter of 2011, with 70 and 119 businesses respectively becoming insolvent. Wet-led pubs (pubs with no food offering) continue to be worse affected.
"The key to success for travel agents and hoteliers in this competitive market”, advised Milburn, “is best available rates and no hidden extras. Findings from the survey showed that 63% of respondents search for the best price, 32% are always looking for a good deal and 30% of respondents won’t mind asking for a discount."