Scotland’s hospitality sector enjoys a strong and stable start to 2017

Scotland’s hospitality sector has had a strong start to the year, with its restaurants and pubs less at risk of insolvency than the UK average, according to research by insolvency and restructuring trade body R3.

Out of all regions in the UK, Scotland’s pubs were the most stable in the UK, with 17.8 per cent in the higher-risk band, against a UK average of 22.6 per cent.

Scotland’s restaurant sector put in the second best performance, with only 22.5 per cent considered to be at higher than normal risk of insolvency, compared with a UK average of 23.8 per cent.

A fifth (20 per cent) of Scotland’s hotels were deemed to be at higher than normal risk of insolvency – slightly higher than the UK average of 19.4 per cent.

The festive season appears to have given a boost to Scottish retailers, which came in second place out of all regions in the stability stakes, at 23.1 per cent higher than normal risk of insolvency, ahead of the UK average of 24.6 per cent.

Scotland’s transport and haulage sector, at 22.9 per cent, was another strong regional performer in a traditionally volatile sector, with 34.1 per cent of UK transport and haulage firms in the higher than normal risk category.

Tim Cooper, Chair of R3 in Scotland and a partner at HBJ Gateley in Edinburgh, said: “There’s plenty of good news to toast for Scotland’s pubs and restaurants, which outperformed the UK average. With the weakness of the pound making the UK a more attractive holiday destination for both foreign and domestic visitors, Scottish tourism could be on course for a prosperous 2017.

“The retail trade has been buoyed by continued consumer spending, and the relative financial stability of Scotland’s retail sector over the festive period is welcome.

“The growing popularity of online shopping, meanwhile, may be one factor underpinning confidence in the transport and haulage sector, and it’s good to see Scottish firms significantly outperforming the UK average.

“However, as any businessperson knows, there’s no room for complacency, and there is still a significant number of businesses at greater than normal risk of insolvency. Seeking advice at the first sign of trouble will increase a business’s chance of survival, so don’t delay if your firm’s circumstances suddenly take a turn for the worse.”

The figures are from R3’s latest insolvency risk tracker. The tracker is compiled using Bureau van Dijk’s ‘Fame’ database and measures companies’ balances sheets, director track records and other information to work out their likelihood of survival over the next 12 months.