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'Staycations' blamed for hotel insolvencies
The rising number of hotels going bust outside London has been blamed on the 'staycationing' trend, as consumers are increasingly swapping hotel nights to accommodation offered by caravan parks and camping sites.
According to PricewaterhouseCoopers (PwC), the rate at which hotel companies became insolvent increased by 68 per cent in the fourth quarter of 2009, when compared to the previous three-month period. The year-on-year figure increased by 31 per cent.
According to David Chubb, partner at PwC, the traditionally quiet trading period between January and March could mean that there is no respite in sight for hoteliers outside the capital.
"Individual hotels based in the provinces and not affiliated with a major brand have continued to suffer from poor occupancy and low rates," he said.
"We expect this to continue into 2010. In addition to the absence of the corporate traveller, the substitution of hotel visits for staycations and camping has taken its toll on hotels, particularly in the provinces.
"Very few hotel owners have experience of operating in the current harsh climate, and must identify realistic options, diagnose problems, and implement a survival strategy. The options could include financial or operational restructuring, strategic partnering or joint ventures, cost reductions or simply tighter cash flow management."
PwC figures show that a total of 155 hotel companies went bust during 2009, compared to 87 insolvencies in 2008.
Image: Purple Hotels, one of the hotel chains that ceased trading during 2009
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