Bankruptcies in the hospitality industry soar by 225%

The hospitality industry, among the worst hit sectors by the pandemic. / efe

The arrival of summer only minimally slows down the impact of the crisis on the sector in which contests have grown the most this year

Clara Alba

The arrival of summer has undoubtedly served to alleviate the complex financial situation that companies in the tourism sector are going through. But only in part. The hospitality sector continues to suffer the impact of the crisis and at the end of August it already had 657 companies threatened by bankruptcy. 225% more than the previous year, as evidenced by the latest monthly report by Informa B&D, a CESCE subsidiary.

The upturn has been noted above all in food and beverage services, which include restaurants and bars, among others. Specifically, the contests have affected 582 businesses of this type. And although the tension has been lowered in August, with only 16 tenders compared to August 20, 2020, it is clear that the sector still has tough months ahead.

On the other hand, the number of competitions in accommodation services was 75 in the period, from 24 registered the previous year.

In total, the number of bankruptcy proceedings in Spain has risen 57.7% this year to 3,941 movements of this type. In other words, the hospitality sector accounts for 17% of the total. A very large figure if one takes into account that the consultancy divides the industries analyzed into 16 sectors. Among them also stands out the increase in bankruptcy proceedings in construction businesses and in shops, which still continue to suffer restrictions due to the pandemic. In fact, in these first eight months of the year, commerce has grouped 20% of tenders, while construction 18%.

SMEs, the most affected

Of the total number of tenders presented in August, 76.26% correspond to micro-companies, 22.30% to small companies and 1.44% to medium-sized companies. The figures are larger than expected, if one takes into account the bankruptcy moratorium approved by the Government that allows companies in insolvency to delay before the court the duty to request bankruptcy until December 31 of this year .

A measure that did stop the increase in contests in 2020, but that has not served to keep the evolution of statistics at bay this year, where the restrictions of the first quarter undoubtedly impacted, in which the third wave of the pandemic had a much bigger impact than expected.

By autonomous communities, in the first eight months of the year the increase in competitions has been somewhat general throughout the country. But the largest increases have been in Catalonia, with 475 more to 1,117 registered contests. In fact, to date, the region concentrates 28.34% of the tenders, Madrid 20.35% and the Valencian Community 13.85%.

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