Hotel Hardships

As the financial crisis struck and shares plummeted across the world, the one upside that many predicted for the British economy was that the weakness in sterling would make British manufacturing and the British tourist industry that much more popular as it became cheaper to visit Britain and to buy British goods.

Whilst this was a nice theory, unfortunately it hasn''t proved to be true. A new report has revealed that insolvencies in the hotel sector climbed massively over the last year and the number of hotels declared insolvent in 2009 was 60% higher than the figure for 2008.

The rise of the staycation has, of course, helped the holiday industry, but people choosing to stay at home has not helped overturn a slump in business travel nor dealt with the problems that companies of all shapes and sizes are facing when they try to get credit.

Also, the staycation doesn''t seem to be a purely British phenomenon. Falling business travel figures in the UK have been supported by a 6% downturn in the numbers of people travelling to the UK for their holidays.

The accountancy firm which carried out the report has argued that whilst people are choosing to stay at home for their holidays, they''ve also cut back on the cost of the rooms which they rent and the length of their stay. There''s a chance, therefore, that some hotels are seeing more customers but those customers are paying less for each stay.

Across all sectors corporate insolvencies actually fell in 2009 compared to 2008 by 11%, in comparison 122 hotel companies were declared insolvent compared to 76 the previous year.

We should bear in mind, of course, that the years leading up to the recession had been particularly good for hotels, especially the big chains, so the fact that more companies have gone bust in 2009 is not necessarily a sign that things have continued to get worse, more that they haven''t recovered enough to fix the damage done in 2008.

The overall outlook for the British hotel industry remains dire, the impact of the volcanic ash cloud may have encouraged more companies to look at video conferencing options as opposed to arranging face to face meetings, and whilst the recession may technically have passed, business travel, a major element of hotel''s profits remain low. The warning from the hotel sector is that things may get worse before they get better.

Article Source: http://www.casinoarticlessite.com

Sal Greet is a budding travel writer with a particular interest in the UK travel industry. For travellers looking to rein in costs a little they recommend Thomas Cook for affordable Hotels in the UK.

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