Over the course of the pandemic there have been numerous comparisons made between the impact of Covid-19 and the Global Financial Crisis in 2008/ 2009. But, this time things are quite different... particularly in the hotel sector.

So far we haven't seen a wave of insolvencies across the industry. Government and financial stakeholder support, lower financial leverage and the hope of the recovery are helping companies to stay liquid.

During a recent webinar we gathered views from a wide range of industry experts. Key themes included:

Insolvency activity is expected to ramp up through the middle of 2021, although there was some optimism that this may be deferred to later in the year.

The trading outlook remains highly uncertain but expectations are that the nearcation and domestic market will recover most quickly and international business travel most slowly.

Views were divided on the recovery of meeting and event space. Traditionally this is a sector that has been slower to recover post-downturn and with large groups gatherings off the agenda for the foreseeable future this may well be the case. The alternative view is that in a hybrid WFH/office world, groups gathering together will be more valued and it may bounce back more quickly than routine international business travel that may be replaced by video calls.

To avoid falling into insolvency engaging with lenders and shareholders is critical. Be open and transparent, manage cash tightly and scenario plan carefully knowing what actions you would take in the different demand outcomes.

Some useful perspectives and there are a number of hotel specific issues that need to be addressed. But, careful planning can help preserve value if an insolvency is unavoidable.