Business failures drop in hospitality sector

Hotels and restaurants are getting to grips with the recession with a 16% year-on- year drop in business failures in the hospitality sector, according to data compiled by insolvency accountants kavanaghfennell.

The number of insolvencies in the sector fell to 171 in 2012, from 204 in 2011, with some high-profile cases including Ashford Castle in Mayo, Radisson Blu in Athlone, and Glenlo Abbey in Galway.

However, the data indicates there were 1,684 business failures across the country in 2012, a 3% rise on the 1,638 in 2011 and a 10% increase on 1,525 in 2010.

Geographically, Leinster accounted for over 64% of all insolvencies, with Munster accounting for 21%, Connaught 10%, and Ulster just 5%.

Insolvency expert Ken Fennell, a partner with kavanaghfennell, said construction was the hardest hit, accounting for 25% of insolvencies. But there are modest signs of improvement, with a year-on-year decrease of 1.4%, with 415 construction insolvencies in 2012 compared to 421 for 2011.

The data shows the retail sector accounted for 13% of all insolvencies during 2012. In September, Clerys went into receivership while sister company Guineys on Talbot St was liquidated.

However, the year- on-year comparison shows a decrease of 3.5% when comparing retail insolvency totals for 2012 (220) to 2011 (228).

Mr Fennell said the manufacturing industry was hardest hit with a 26% year-on-year increase in the level of corporate insolvencies from 103 in 2011 to 130 in 2012. Manufacturing accounted for 8% of all insolvencies in 2012.