A series of high profile regional events has helped the North East hotel sector bounce back from a tough summer.
New research by insolvency trade body R3 into the proportion of North East companies with a higher than normal risk of insolvency found that the number of regional hotel businesses in this position has dropped by four per cent since the start of September.
The sector had recorded a rise in this risk of seven per cent during July and August on the back of disappointing summer weather, but the combined impact of the Great North Run, Rugby World Cup and the new football season appears to have helped it make up lost ground.
Recent figures released by destination management and marketing agency NewcastleGateshead Initiative suggested hotel occupancy rates during the Rugby World Cup had reached up to 99% on match days, with more than £40m being generated through it across the regional economy.
The North East pub sector has also taken advantage of the region’s busy September, with a five per cent month-on-month fall in the proportion of North East companies therein with a higher than normal risk of insolvency, while the regional restaurant sector is now the second best performing in the whole of the UK,
Every month, R3 uses research compiled from Bureau van Dijk’s ‘Fame’ database of company information to track the number of businesses in key regional sectors that have a heightened risk of entering insolvency in the next year.
Elsewhere in the research, the North East transport/haulage sector has recorded the lowest such risk of any of the 12 UK regions for the eighth consecutive month.
The region’s professional services sector has seen its insolvency risk fall by eight per cent in the last six months, but on the downside, the North East construction sector is still only faring better than its peers in Northern Ireland.
Allan Kelly, chair of R3 in the North East and a restructuring partner with Baker Tilly North East, says: “After a disappointing summer, the events we’ve been enjoying across the North East have come as a welcome boost for our regional leisure operators – they’ve had a highly visible around the region, and it’s pleasing to see that this has translated into positive outcomes for many of our businesses.
“With Christmas on the horizon, hotel, pub and restaurant businesses will be hoping to maintaining this momentum through the remainder of the year, and to keep taking steps forward on the road to ever-greater stability.
“The North East’s knowledge economy has grown in recent years to play an increasingly important role within the region, and it’s very encouraging for its future prospects to see the insolvency risk it faces falling over several consecutive months.
“Despite a generally improving economic picture, problems can arise for any firm at any point, and proactively seeking advice from a qualified source such as an R3 member as soon as problems start to become apparent is the best way to begin to rectify them.”