Leisure and hotel companies issued just six warnings between April and June, compared with 11 between January and April, according to figures from accountants Ernst & Young.

But the sector still issued more warnings than any other industry.Most of the warnings were attributable to factors specific to a particular company, said Ernst & Young, or to short-term problems such as April's very poor London hotel occupancy, Sars, or the war in Iraq.

Partner Iain Wilkie said: 'The sharp fall in the sector's warnings and the fact that many of these are attributable to one-off factors, suggest that the wider malaise that has afflicted hospitality and leisure businesses may be starting to ease.'

He added: 'With the first glimmers of an upturn appearing by the end of the quarter, the key now for the sector lies in forecasting not just the scale of the recovery, but its timing.'