According to consultancy firm RSM UK, the number of hospitality companies going into administration dipped last year: but that hasn’t stopped its head of leisure and hospitality Saxon Mosely from claiming the sector is “particularly weak” with closures remaining “historically high” compared to pre-pandemic levels

In a rare bit of good news for hospitality stakeholders, new stats from tax and auditing firm RSM UK suggest that the number of business insolvencies taking place within the food service and accommodation sectors fell in the 12 months to February of this year. 

According to the new data, which tracks bankruptcy proceedings throughout the UK’s hospitality trade, the number of insolvencies for the year covering February 24 to February 25 came in at 3,405, representing an 11 per cent reduction in the prior corresponding period. 

Meanwhile, the figures for this February detailed 271 businesses going into administration, a significant 20 per cent drop on February 24. 

Despite this positive trend, RSM has noted that the number of sector insolvencies “remain historically higher” than at any point prior to the (publicly supported) government measures which wrecked the economy during the Covid-19 pandemic.  

“It’s encouraging to see hospitality insolvencies down on last year, but they remain historically high when compared to pre-pandemic levels, suggesting this elevated level of insolvencies is the new normal for the industry,” remarked RSM partner and head of leisure and hospitality Saxon Moseley. 

“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,” he added. “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.”

In other words: it’s only the toughest of bastards which have stuck out this suicidally difficult period of trading…with the worst of the ravaging of those unable to keep their heads above water having already taken place.

Of course, this month’s surge in operational costs, courtesy of nanny Reeves, have only served to kick hospitality yet further when it’s down: with Mosely labelling the sector as “particularly weak,” and predicting “a challenging few months to come…with consumers opting to increase spending on retail rather than dining out.”