Financial risk off the menu at West Midlands hotels and restaurants

THE West Midlands’ hotels and restaurants are amongst the region’s most improved businesses in terms of financial security, according to new research.

Figures compiled by insolvency body R3’s Midlands branch show that under a quarter [23.2%] of hotels in the region are at higher than normal risk of insolvency, marking a 5% decrease on March’s figure.  

Likewise, the proportion of restaurants [44.3%] with a higher than normal risk of insolvency has also fallen, reversing the trend of monthly increases registered by the sector this year.

The outlook is also improving for the West Midlands manufacturing, construction, agriculture and retail sectors, all of which registered monthly decreases in the percentage of businesses with an elevated risk of insolvency.
 
R3 Midlands Chairman Chris Radford, a partner at the Birmingham office of Gateley, said while the results were encouraging, businesses still needed to remain cautious.

“These statistics are starting to paint a positive picture for business recovery in the region and the indications of growing sector stability are encouraging,” he said.

“There are, however, significant economic and legislative hurdles to overcome, not least the implementation of the National Living Wage.  While laudable in its aims, it may impact greatly on those businesses with a high proportion of lower paid workers.

“With so much uncertainty still upon us, it’s important for all business owners to plan ahead and monitor finances carefully.  If cash flow becomes a major issue, it’s imperative to seek professional advice before it’s too late.”