Hospitality insolvencies rise by 5%

Insolvencies in the hospitality sector have increased year-on-year, according to analysis by RSM UK.

The insolvency statistics show accommodation and food services insolvencies were up 5% in the year to September 2024 (from 3,490 in the 12 months to September 2023, to 3,679 in the 12 months to September 2024. Insolvencies in the sector saw another month-on-month decrease from 270 in the previous month (August 2024) to 260 (September 2024).

Saxon Moseley, Partner and Head of Leisure and Hospitality at RSM UK, said “While food and accommodation insolvencies fell for the third consecutive month, this may well be the calm before the storm following recent cost increases announced in the Autumn Budget and additional compliance changes under the Employment Rights Bill. The additional costs are set to put further pressure on operators’ already-stretched margins, meaning there’s likely to be more insolvencies to come. 

“The hospitality industry is already in the doldrums, with subdued consumer confidence and people continuing to prioritise saving over spending. In the short term, operators will be hoping to make the most of the crucial festive season and build up a war chest of cash reserves, but that’s unlikely to be enough to see them through the raft of additional costs from April next year.

“We expect to see a number of operators struggle to make ends meet in the New Year, with resourcing and pricing levers already pulled and little scope for further cost cutting. Calls for the government to rethink its recently announced employment tax changes will grow louder as more businesses conclude their operations are no longer viable in the current trading environment.”