Insolvencies continue within the hospitality sector
We are continuing to receive high levels of enquiries from businesses in the hospitality sector, seeking advice regarding their financial position, and this experience is echoed by others.
The Insolvency Service has recently published figures to the end of May 2025 confirming that pubs and restaurants are continuing to close at very high levels, with 1,398 companies in the accommodation and food service sector going into formal insolvency between January 2025 and May 2025.
Figures have also been released by the British Beer and Pub Association (which represents 20,000 pubs) to indicate that over 350 pubs are expected to close this year in England, Wales and Scotland. This is forecast to lead to 5,600 direct job losses.
Office of National Statistics (ONS) figures show that unemployment has jumped to a 4 year high of 4.7% in the three months to May, and the trade body UK Hospitality says the sector has lost 84,000 jobs since last year’s Autumn budget. These are signs of businesses taking tough decisions to continue to trade.
Unfortunately, the figures had been anticipated due to increased Employers’ National Insurance Contributions and National Minimum Wage increases from April. These issues were coupled with high cost inflation and high energy bills while many hospitality businesses are still recovering from the impact of the Covid pandemic and the additional debt that left them with.
The bright spots for hospitality have been the good weather during much of the early summer plus high-level sporting events such as the Women’s Euros and high-profile music festivals and events which significantly boost income in the hospitality sector. However, the underlying problems remain.
2025 is likely to continue to be a challenging year and unfortunately the closure of hospitality businesses also has a knock-on effect for businesses that supply them. (See my earlier article examining whether suppliers are likely to be paid One of my customers has gone into an Insolvency Process – will I be paid? – RPG Chartered Accountants )
My advice to those in the hospitality industry
My advice continues to be to ensure that you have up to date bookkeeping and accounts, and to regularly update your forecasts taking all anticipated cost increases into account. We are always happy to introduce you to our colleagues at RPG Chartered Accountants if you need accountancy advice.
As Insolvency Practitioners, we have a depth of experience in advising businesses in the hospitality industry who are facing financial difficulties. We are always available for an initial discussion to help business owners decide on the best solutions for them. It is never too early to take professional advice, and an early intervention can reduce more significant losses further down the road.
Gareth Hunt and the RPG Business Recovery Team are always very happy to have an informal, free of charge discussion with any business or individual potentially in distress and to discuss options with them. It’s best to take advice as soon as possible when more options are likely to be available. Please call 0161 608 0000 or email info@rpg.co.uk to speak to an Insolvency Practitioner in Manchester for further information.
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