Hospitality insolvencies in January not as bad as feared
The latest company insolvency statistics show accommodation and food services insolvencies fell 7% from 3,747 in the 12 months to January 2024 to 3,474 in the 12 months to January 2025. However, insolvencies in the sector increased 21% month-on-month, from 225 in December 2024 to 273 in January 2025, and were up 3% when compared to the same month last year (265).
Saxon Moseley, partner and head of leisure and hospitality at leading audit, tax and consulting firm RSM UK, said: “Hospitality trade at the start of the year was particularly tough, so the rise in insolvencies in January was expected, but perhaps not as bad as feared. While some operators managed to weather the storm at the end of last year to maximise trade during the festive period, January’s figures suggest the resilience of these businesses could be starting to slip.
“With more headwinds to come from April in the form of tax rises, combined with new regulatory requirements, pressures on the leisure and hospitality industry are only set to increase. It’s crucial that businesses closely monitor their cashflow during this period of uncertainty.
“Operators will be looking to the government for some form of support in the Spring Statement. This may be temporary support to bridge the gap between April and the consumer-led recovery that is expected to come later this year. Those that manage to hold on during this challenging time will be best placed to recover lost ground and reap the benefits of a more favourable trading environment.”