04/05/2010 - Business travel slump hits hotels
A slump in business travel has contributed to an increasing number of failing hotel companies, it has been disclosed.
Hotel insolvency increased 61% last year compared with 2008, and "more casualties" could be added to the list, accountancy firm Wilkins Kennedy's figures showed. Although domestic demand at hotels was increased by "staycations" - where people holiday at home - establishments were hurt by a fall in business travel.
The fortunes of the hotel industry were contrasted by the total number of corporate insolvencies across all sectors, which fell by 11% to 10,832 in the past 12 months, a decrease from 12,112 in the previous year.
Wilkins Kennedy director Anthony Cork said: "2009 was marked by a strict tightening-up of corporate budgets, which led to a massive curtailing of business trips, conferences and team-building events.
"The net long-term effect of the volcano ash crisis is difficult to call, but if it speeds the shift to video-conferencing and other new forms of communication rather than face-to-face meetings, this will have another negative impact on the corporate travel segment."
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