A recent report shows that last year the number of hotel insolvencies increased dramatically on a year earlier, despite the fact that more people decided to holiday at home because of the global economic downturn. The disappearance of the business traveller as well as problems obtaining financing, were also factors.

The study, by accountants Wilkinson Kennedy, suggests that the trouble caused by the recent volcanic ash cloud which grounded European airline fleets for almost a week, will also have a negative knock-on effect.

According to the report the number of hotel firms forced to close their doors last year was up by 61 per cent. According to the Office for National Statistics, the number of visitors to the UK in 2009 was only down by 6 per cent.

However, the Wilkinson Kennedy report shows that even though more people chose to stay at home and visitor figures were not as dire as they could have been, the hospitality sector showed extremely weak results. Antony Cork, a director at Wilkinson Kennedy, said that there simply wasn’t enough spending by people staying in hotels to allow some hotels to keep running. People worried about the financial situation were not splashing out on the usual extras such as room service or spas. Cork also said that customers chose to stay for shorter periods of time.

Last year, 122 hotel firms were declared insolvent. In 2008, the number was 76. Mr Cork said that until businesses begin to start spending on conferences, team building events and business trips, the hotel sector is expected to continue to suffer.