As operators gear up for the summer season, the North West tourist industry is in healthy shape. New figures from the insolvency and restructuring trade body R3 show that the region’s hotels and tourism businesses now have the lowest risk of failure of any of the major sectors which it monitors.
Just 19% of North West hotels are considered at above normal risk of failure in the next 12 months – the same proportion as holiday accommodation businesses, stately homes, and historical buildings, while amongst museums the figure is slightly higher at 20%. An exception is amusement parks, of which 29% in the region are considered at risk.
The figures show that other hospitality businesses are also on safer ground than in previous years, with just 21% of North West restaurants and 22% of pubs considered at higher than normal risk. By contrast, in the most distressed sector, transport and haulage, 34% of businesses are at risk, while in technology and IT, 32% are at risk.
The tourism figures are in line with the latest data from the Office for National Statistics which show that both the number of overseas visitors and tourism spending have reached record levels. The UK received 2.9 million overseas visits in January, up 11% year-on-year, while tourism spending was up 15% on last year at £1.5 billion.
Paul Barber, the North West chair of R3 and a partner at Begbies Traynor, says: “A relatively buoyant national economy, together with the fall in sterling, has been a boost for tourism and leisure. People are seemingly visiting places and spending. Meanwhile, the low pound has made the UK more attractive to overseas visitors but has made it more expensive for Britons to go abroad and therefore encourages people to holiday at home.
“However the figures mask the twin track economy – while the National Parks are a big attraction and Manchester and Liverpool are benefiting from the popularity of city breaks and have the advantage of many sporting and entertainment attractions, seaside towns like Blackpool and Morecambe still face various economic challenges, as reflected in the high level of personal insolvencies within these areas.
“There is certainly no room for complacency. Overall around one in five tourism and hospitality firms are at risk of insolvency. As these businesses are heavily dependent on consumer spending and more regional economic factors, any change in the economy can quickly affect their fortunes. They need to keep a firm grasp on their finances and be alert to any signs of distress.”
R3’s insolvency risk tracker is compiled using Bureau van Dijk’s ‘Fame’ database and measures companies’ balances sheets, director track records and other information to work out their likelihood of survival over the next 12 months.