The hospitality sector continues to face severe financial strain, with insolvencies easing slightly in the first half of 2025 but still running at historically high levels.

Government data show 1,706 accommodation and food service businesses – including hotels, restaurants and pubs – entered insolvency between January and June. This represents a 5.5 percent fall on the 1,806 closures recorded in the same period of 2024. However, the second quarter brought a 6.5 percent rise compared with the first, with 880 companies going under. Monthly insolvencies have consistently exceeded 270 this year, underscoring the sustained pressure on the industry.

The Buchler Phillips Hospitality Index (BPHI), which has tracked sector insolvencies since 2014, climbed from 181.2 in March to 197.3 in June. The index reached a peak of 273.4 in August 2023, coinciding with a spike in closures.

“It’s not getting any easier out there; if anything, it’s tougher,” commented Jo Milner, managing director at turnaround specialist Buchler Phillips. “Hospitality is stuck near the top of the insolvency league table for now, anchored there by pressure on consumer spending and a number of forces behind higher staff costs.”

The sector is estimated to be grappling with £3.4bn of additional costs, partly due to higher National Insurance contributions. Industry leaders warn that further mandatory pension increases could prove the final nail in the coffin for many businesses.