The UK hospitality sector saw a 21 percent rise in insolvencies at the start of 2025, highlighting ongoing financial struggles for businesses in the industry. 

According to the latest figures, 273 hospitality businesses became insolvent in January, up from 225 in December 2024. This also represents a 3 percent increase from January 2024, when 265 insolvencies were recorded. However, the total number of hospitality insolvencies over the past 12 months fell by 7 percent, from 3,747 to 3,474. 

“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,” Saxon Moseley, partner and head of leisure and hospitality at audit, tax and consulting firm RSM UK, told RestaurantOnline.

“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.”

Hospitality businesses face further challenges as tax increases and new regulatory requirements come into effect from April 2025. Moseley emphasised that cash flow management will be critical for businesses navigating this uncertain period.

“It’s crucial that businesses closely monitor their cashflow during this period of uncertainty.”