The number of administrations in the licensed trade and hotels sector increased by 19.3% last year, and the rise in insolvencies is expected to continue in Q1 2012, according to figures compiled by Baker Tilly. However, hotels are “primarily responsible for the increase”, Baker Tilly said, with the number of administration appointments increasing from 51 to 80 year-on-year (+56.9%). Overall, there was a 29.2% increase in insolvencies between Q3 and Q4 2011. Peter Cooper, partner at Baker Tilly Restructuring and Recovery LLP, said: “At the end of Q3 2011, we predicted an increase in the number of hospitality and leisure industry insolvencies for Q4, based on uncertainty around the prospects for a full scale economic recovery, a decline in consumer confidence, a fall in spending power and restrictions in the availability of working capital. “As the year came to a close, there is no doubt these factor combined to create very tough conditions for an increasing number of distressed businesses in the sector. Our view remains unchanged: there is no room for complacency or underperformance in the current climate. “We expect the rise in insolvencies to continue into Q1 2012 as a lag response to defaults on December quarter rent payments.”