R3 study reveals improved financial outlook for region’s hospitality sector
- Credit: Archant
Hotels top the list of the East of England’s most improved businesses in terms of financial security, according to a survey by insolvency body R3.
The proportion of hotels with a higher than normal risk of insolvency fell by 2.5% in June to 187 businesses, the second consecutive monthly fall.
The proportion of pubs at risk also decreased in June, by 1.6% to 522, the third consecutive month that the figure has dropped.
The outlook has also improved for restaurants in the region, with a 1.1% fall in June in the proportion of operations deemed to be at higher than normal risk of insolvency. However, with 1,630 restaurants still struggling – more than 40% of the total – it remains the area of hospitality facing the most significant financial challenges.
R3’s eastern region chairman, Frank Brumby, a director of law firm Isadore Goldman in Norwich, welcomed the hospitality sector’s move towards greater stability, but advised businesses to remain cautious.
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He said: “These statistics are beginning to paint a positive picture for East Anglia, particularly as we embark upon the busy holiday season. The vast majority of hospitality businesses are well placed to capitalise on a surge in demand.
“But while the sustained economic recovery and uplift in pubs, hotels and restaurants is encouraging, some hospitality operations remain amongst those at highest risk of insolvency. With so much uncertainty still upon us, it’s important for all business owners to plan ahead and monitor cash flow carefully, resisting the temptation to over trade.
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“If cash flow becomes a major issue, it’s absolutely crucial that directors seek professional advice before it’s too late.”