Region has high level of hotels at risk of failure

With almost a quarter – or 23 per cent – of hotels in the region at risk, the research by R3, the insolvency trade body using Bureau Van Dijk’s Fame database, also reveals that Yorkshire and the Humber is the region with the second highest rate of hotels at high risk with 4.5 per cent, topped only by Wales with 4.6 per cent and compared with the lowest level of 1.46 per cent in the West Midlands.

Andrew Walker, chair of R3 in Yorkshire and partner at law firm Irwin Mitchell, which has offices in Leeds and Sheffield, said: “The hotel industry is a vital to the regional economy with York providing a major tourist destination and cities such as Leeds and Sheffield traditionally benefiting from business travel.

“Not only are hotels a major employer, the additional spend by visitors also provides a much-needed boost to other local businesses, supporting shops, restaurants and bars all of which have been suffering from the reduction in consumer’s disposable income.

“We would urge those concerned about the long-term viability of their business to seek the advice of a professional sooner rather than later.”

Frances Coulson, R3 president, recently said that the Government could do more to support economic growth through business rescue. Following the announcement of the Budget, he said: “The economy will only recover if we have strong businesses to support it. There are a number of ways that the Government can continue to improve the UK’s business rescue regime, therefore helping viable businesses to survive and provide a much needed boost to the economy.

“For example, we would like the Government to address the harm caused by suppliers demanding ‘ransom payments’ in an insolvency situation. We believe a small change to the Insolvency Act, preventing suppliers from ceasing supply or changing contractual terms, could save up to 2,000 businesses a year, a 14 per cent reduction in liquidations and increased returns to creditors, including HMRC.”