Almost half of the hotels in Southampton are currently financially struggling, according to research by R3, the insolvency trade body. But help could sail into town this September, courtesy of the PSP Southampton Boat Show, which is expected to attract large numbers of visitors to the city.
According to the latest figures from R3, using Bureau van Dijk’s Fame database, nearly half (47 per cent) of hotels in Southampton can be classed as ‘at risk’ of failure in the next 12 months. It puts hotels at a higher risk than most other types of business in the city, with the cross sector average of businesses at risk standing at 26 per cent.
Across Hampshire, 33 per cent of hotels are ‘at risk’, compared to a county cross-sector average of 27 per cent. Nationally, 22 per cent of hotels can currently be classed as ‘at risk’, compared to 25 per cent of all businesses.
But as the PSP Southampton Boat Show prepares to fling open its gates, local insolvency experts say Southampton’s hotel industry is likely to get a well-needed boost.
And while members of the Southern Committee of R3 stress that being in the ‘at risk’ category does not necessarily mean a company will go under, they say that it is an early warning sign for hotels.
James Stares, Chairman of R3’s Southern Committee and Director at Grant Thornton, says: “It is important to remember that even the most distressed of businesses are not guaranteed to fail. Seeking external advice early on can be the difference between a company coming through its difficulties or folding. It’s important to deal with financial problems before they become too big to handle.”
He adds that while the latest figures may seem bleak, the PSP Southampton Boat Show is likely to provide a well-needed boost for the city’s hotel industry. Last year organisers of the show predicted an extra £12 million would be generated by its presence as thousands of visitors flocked to the city.
James concluded: “While September traditionally represents a ‘slowing down’ for the hotel trade nationally, Southampton’s hoteliers are in a unique position of having this ‘bonus month’. ‘Staycationers’ may have headed to other South coast destinations during recent heat waves, but now is the city’s hotels’ chance to catch-up. It is exhibitors at the show who will have the most to contribute to hotels’ coffers, as they stay in the city’s hotels for the duration of the 10-day event, plus time before and after to set up and pack down. This could well give our local hotel industry the boost it needs.”