Hospitality insolvencies remain ‘historically’ high despite Feb fall

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, according to data from the Office for National Statistics.

Insolvencies in the sector fell 20% to 271 in February 2025, compared with 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 RSM, called the numbers “encouraging” but stated that they suggest this is a “new normal” for the sector.

He said: “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.”

He added: “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.”

Overall, the number of registered company insolvencies in England and Wales was 1,992 in March 2025, 2% lower than in February 2025 (2,032) but 9% higher than the same month in the previous year (1,826 in March 2024).

Company insolvencies in March 2025 consisted of 295 compulsory liquidations, 1,543 creditors’ voluntary liquidations (CVLs), 137 administrations and 17 company voluntary arrangements (CVAs).