Tough Times For Hotels Says Grant Thornton
Our World | On 29, Jan 2013
In a recent survey of restructure specialists, Grant Thornton, one of the big four accountancy firms has identified that hotels are just behind the retail sector in terms of potential financial vulnerability in 2013.
GT surveyed 230 of the UK’s leading portfolio bankers, asset lenders, restructuring advisers and senior turnaround professionals. In our language, the people you call when you run out of money. They were questioned about their expectations for 2013 overall, and which sectors they thought would be keeping them busy!
Overall, like everyone else, they perceived 2013 to be fairly flat with little increase in real terms in any sector of the economy. Encouragingly the overwhelming majority also did not see a downturn which was a vast improvement of the previous 12 months.
They were then asked for their views on the sectors that were most and least at risk from a restructuring perspective in 2013: i.e. who is facing the biggest issue. The results were not surprising with the least risky sector viewed as energy and utility with less than 3% of the audience perceiving any significant level of risk. At the other end of the scale, the retail sector was deemed the area most at threat with 84% saying this was the sector with the lowest level of resilience. A very close second with 83% was “Hotels, Pubs & Leisure” perhaps reflecting the heavy reliance on consumer disposable income in this area.
With margins and rates under pressure and with many London hotels saying that January has seen poor occupancy levels, this report will not be welcome news. The Olympics may have delivered extra business to London in 2012, but it also brought a plethora of new hotel openings which now add even more pressure to this overcrowded sector. With this background 2013 looks set to continue the trend of ever more aggressive special offers, discounts, added value packaging. So if you can be flexible with your timing and location, there will be plenty of bargains out there in the coming months.