Hotels

Sector Payment Analysis: Hotels

We have conducted a rigorous evaluation of payment behaviour within the Hotels sector, comprising a sample size of 89 companies. Our primary objective was to analyse the financial reliability and settlement culture prevalent amongst these entities. The data reveals a highly standardised payment timeline, characterised by a remarkable convergence between the mean and median figures. The average payment time stands at 36.2 days, whilst the median is recorded at 37 days. This alignment indicates that the data is not heavily skewed by extreme outliers, suggesting a consistent sectoral habit of settling invoices just beyond the standard 30-day commercial terms. Consequently, the standard deviation of 15 days points to a moderate level of variability, implying that whilst cash flow is generally predictable, credit controllers must remain vigilant regarding deviations from the norm.

When we organise the data by payment speed distribution, it becomes evident that the Hotels sector favours a 'Moderate' payment schedule. A significant majority—51.7% of the analysed companies—settle their accounts between 31 and 45 days. This clustering is further reinforced by the interquartile range, which spans from 30 to 43 days. This specific window suggests that many finance departments in this sector likely operate on monthly payment runs that slightly lag behind invoice receipt dates, rather than adhering strictly to net-30 terms. Only 30.3% of companies fall into the 'Fast' category (0-30 days), demonstrating that prompt payment is not the dominant standard. Furthermore, it is crucial to realise that despite the stable averages, a substantial 32.4% of payments are classified as late, necessitating proactive debtor management.

An examination of the extremes reveals both highly efficient and critically poor practices. Amongst the top performers, nine companies specialise in rapid settlement, clearing debts in fewer than 20 days, with the fastest payer settling in a mere single day. Conversely, the tail end of the distribution highlights distinct risks; 14.6% of companies take between 46 and 60 days to pay, and we identified a 'Critical' tier where payments stretch beyond 90 days. The slowest payer in the sample took 106 days to settle, representing a significant credit risk. Whilst these extreme delays affect only a small percentage (1.1% in the 90+ day category), suppliers must be wary of these outliers to maintain healthy cash flow.

Geographically, the sector's financial activity is heavily centred in the South of England, with London and the South East accounting for nearly half of the sample (44 companies combined). This regional concentration may influence the overarching payment culture, potentially reflecting the operational rhythms of larger, metropolitan headquarters. In summary, whilst the Hotels sector displays a relatively stable and predictable payment rhythm centred around the 37-day mark, the prevalence of late payments suggests that suppliers should not anticipate early settlement and should factor a one-week delay beyond standard terms into their cash flow forecasts.