The tourism, leisure and hospitality sectors in Lancashire have been dealt a blow by pre-Brexit insecurities.
This has caused levels of ‘significant’ business distress in those industries to escalate by 6% in the last three months compared to the same period last year, according to data released today by leading business rescue and recovery specialist Begbies Traynor.
Leisure, hospitality and tourism-related industries have been hit across the board by financial problems.
In the second quarter of 2016, Lancashire travel and tourism organisations saw a rise in significant distress of 7% on the same period in 2015, while 5% more bars and restaurants (829 in total), and 5% more hotel and accommodation businesses (147 businesses), found themselves in financial difficulties. In the region’s sport and health sector, significant distress was up also by 5%.
The effect on the county’s leisure sector has been mirrored across other sectors of the Lancashire economy, with industrial and transportation firms the worst hit, recording an 18% hike in distress compared to Q2 2015. Sectors that performed better – with decreases in distress – included food and drink producers and food and drug retailers, both of which saw a 9% fall in distress year on year.
Begbies Traynor’s quarterly Red Flag Alert data shows that overall the most common, or ‘significant’, indicators of business distress have increased by 3% year on year in Lancashire, and have fallen by 2% since the previous quarter.
The UK average year-on-year increase in significant distress was 1%, with the north west region experiencing a 2% rise.
“While it has been good news for some of our industries, it’s worrying that Lancashire’s tourism, leisure and hospitality sector as a whole seems to have been dealt something of a body blow in the last three months,” said Dean Watson, a lead partner at Begbies Traynor.
“Significant distress is often seen as an early warning signal of more severe financial problems to come, which can lead to business failures.
“And while this data was largely recorded in the run-up to the referendum, the most recent consumer surveys are spelling further gloom and plummeting consumer confidence, particularly in the north of England.”