The North East hotel sector has bucked a wider trend of regional business sectors experiencing growing stability during the second quarter of the year.New sectoral research by insolvency trade body R3 has revealed that over the last three months, companies in nine of the ten industries that it monitors have recorded falls in the proportion of businesses with a heightened risk of insolvency.
However, the hotel sector has seen this proportion increase by three per cent between April and June to 23%, which is above the national average.
Every month, R3 uses research compiled from Bureau van Dijk’s ‘Fame’ database of company information to track the proportion of businesses in ten key regional sectors that have a heightened risk of entering insolvency in the next year.
On the upside, the North East transport/haulage sector has been ranked as the most stable of its peers across the UK for the 15th month in a row, while the region’s restaurant sector is once again top of its national rankings for a seventh consecutive month.
The North East professional services sector registered the greatest upturn during quarter two, with a five per cent improvement in its business stability rate.
The regional agriculture, retail and pub sectors are all in the top four place in their respective tables, while even though the regional construction industry remains bottom of the list for business stability, it has registered a marginal improvement over the second quarter of the year.
Neil Harrold, chair of R3 in the North East and a partner with Hay & Kilner Solicitors, says: “There has seemed to be quite a lot of uncertainty around the regional business community over recent months, with the EU referendum and other factors causing concern among business owners, but these figures would suggest that conditions have been improving on a slow and steady basis.
“As a region which is a net exporter of goods, it will be very interesting to see over the coming months how the result of the EU referendum impacts on business stability. What all regional company owners want quickly, regardless of the way they voted, is at least a degree of certainty about how the new business landscape is going to pan out.
“The disappointing weather that the North East has endured so far this year may be a factor in hotel businesses not performing as well as their owners would have liked, but this should not be confused with a lack of confidence in the opportunities that the sector offers, as we’re continuing to see substantial investment in hotel construction and refurbishment right across the region.
“The second half of the year offers plenty of opportunity for the hotel sector to make up for recent lost ground, and with the usual packed calendar of events happening across the North East over summer being supplemented by the likes of the Tall Ships’ visit to Blyth and Kynren taking place in Bishop Auckland, there’s every chance it will do so.
“Financial issues can crop up for any business at any point, and company owners need to take swift, proactive action to resolve any issues as soon as they become apparent to give themselves the best possible chance of putting things right.”