Hospitality insolvencies down but remain historically high

Today’s show accommodation and food services insolvencies were down 11% from 3,829 in the 12 months to February 2024 to 3,405 in the 12 months to February 2025. Insolvencies in the sector fell 20% to 271 in February 2025, compared to the same month last year (339). However, they remain historically higher than pre-pandemic levels.

Saxon Moseley, partner and head of leisure and hospitality at leading audit, tax and consulting firm 91探花, said: “It’s encouraging to see hospitality insolvencies down on last year, but they remain historically high when compared to pre-pandemic levels, suggesting this elevated level of insolvencies is the new normal for the industry.

“In recent years, we’ve seen less viable businesses in the hospitality sector either exit the market or undergo restructuring, meaning only the more resilient operators are left. While the industry is still losing a large number of businesses each month, naturally, these numbers should start to fall as less viable brands close up shop.

“Operators are facing significant economic and geopolitical uncertainty which is weighing heavily on consumer confidence. This, combined with April’s rise in employment costs, means it could be a challenging few months to come. Hospitality trade continues to be particularly weak, as consumers are opting to increase spending on retail rather than dining out. However, with the warmer weather making an appearance and real wages continuing to climb, it’s hoped the sector can enjoy a strong summer of trading to see it through the various headwinds.”