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Businesses in the North East hospitality sector have a lower than average risk of insolvency

The long-suffering North East hospitality sector is beginning to widen and bed in, according to research by insolvency trade body R3.

R3 North East’s latest assessment found that the proportion of restaurant businesses in the North East with a higher than normal risk of insolvency now stands well below the national average for the sector.

R3 uses research compiled from Bureau van Dijk’s ‘Fame’ database of company information to track the number of businesses that have a heightened risk of entering insolvency in the next year.

The North East sectoral figures for August has shown that the proportion of restaurant businesses with a higher than normal risk of insolvency is just 26%, which is significantly below the national figure at 30%.

This figure is well ahead of many other parts of the UK, including the East of England (32%), London and Scotland (both 31%).

Figures released by commercial real estate specialist Colliers International showed that there had been a 50% rise in transactions in the North East and Yorkshire hotel market since the start of the year.

In addition, research by Deloitte which highlighted a 65% year-on-year rise in hotel transaction activity across the UK in the first half of 2014.

Allan Kelly, chair of R3 in the North East and a restructuring partner in Baker Tilly North East, says: “While there might be a degree of seasonality in these latest figures, there’s certainly encouragement to be had around the North East hospitality sector that both R3’s report and others are all pointing to.

“The sudden impact of the credit crunch and recession on everyone’s disposable income hit industries that rely on discretionary spend disproportionately hard, and even though the North East has a huge amount to offer in terms of excellent restaurants and hotels, it’s taken a long time to regain the ground that was lost.

“The wider regional economy still seems very much to be a mixed bag, but the overall feeling across the North East remains optimistic and there’s every expectation that the general improvement in the economic atmosphere that we’ve felt over the last 12 months will be sustainable over the longer term.”

This was posted in Bdaily's Members' News section by Ellen Forster .