The number of UK hotel insolvencies hit a five-year high in 2019, following a drop in business travel and tougher competition from Airbnb.

Hoteliers suffered a 60% jump in insolvencies over the year to September 2019 affecting 144 individual sites, according to figures compiled by the accountancy group UHY Hacker Young. That is up from 90 sites a year earlier.

The hospitality sector has been grappling with a slowdown across the UK economy that has caused businesses to cut spending on conferences and awaydays, which tend to be a key driver for hotel revenue.

The number of overseas tourists choosing to visit Britain also dropped by 3% and while there has been a surge in staycations among UK residents, hotels are having to compete with online booking platforms such as Airbnb that offer home stays, often at lower prices.

Facebook Twitter Pinterest Hotels are having to compete with online booking platforms such as Airbnb. Photograph: Charles Platiau/Reuters

The surge in competition has forced hoteliers to lower their prices to win over customers just as they face rising costs. In 2019, around 15,500 rooms were added to the hospitality market, with another 19,300 expected in 2019.

Meanwhile, margins are being squeezed by higher business rates and costlier food and drink imports caused by the weaker pound. That is on top of a rising minimum wage, which increased around 5% to £8.21 in April 2019, and is set to rise to £8.72 for over-25s from the start of April.

The report also found rising costs linked to listing on sites like Booking.com, which help hoteliers reach a wider audience but charge hefty referral fees that knock profits.

Peter Kubik, Partner at UHY Hacker Young, says: “The hospitality sector is facing upheaval. Those hotels that are unable to fund-change face being left behind. On top of that, Airbnb is increasing its market share, and not just amongst millennials. Hotels – many of which are lagging behind in their use of technology – are going to have to quickly bring themselves up to speed.”

Sites that fell into administration last year include the national Hashtag Hotels chain, Charnwood Lodge in Loughborough, Leicestershire, and hotels in Llandudno, Wales, owned by the embattled financier Gavin Woodhouse.