Hospitality insolvencies flatten amidst wait for festive season surge

However, insolvencies are said to still remain historically high.

Accommodation and foodservices insolvencies were flat month-on-month at 265 in September 2025, only slightly up from 262 from the same period last year, as most businesses await the surge of spending during the festive season, analysts said.

“After a prolonged period of disappointing sales, many are hoping the Christmas period delivers a much-needed boost, so they can build up their depleted cash reserves,” Saxon Moseley, partner and head of leisure and hospitality at leading audit, tax and consulting firm RSM UK, said.

Moseley said demand continues to be subdued, with only pubs being the main beneficiaries of a “flight to value” by households. “Consumers still want to socialise, but are doing so in the most cost-effective way. The risk is that the fear of the unknown of what will be announced in the budget causes them to stop spending completely, which would be a further setback for the industry,” Moseley added.

Meanwhile, the Buchler Phillips Hospitality Index revealed that some 857 accommodation and food service companies, including hotels, restaurants and pubs, closed in the three months to September 2025, down 2.7% from 881 in Q2 this year, but matching the same three months of 2024, according to government data. Offering little cheer, the number of monthly hospitality insolvencies has remained consistently over 275 so far this year.

“Life remains extremely tough for the hospitality sector. Along with retail and construction, it’s right up there with the worst-hit UK business sectors. Pressure on consumer spending remains, staff costs have risen significantly, and pre-Budget uncertainty hasn’t helped,” Jo Milner, Managing Director of Buchler Phillips Hospitality Inde,x said.

Milner said hospitality businesses face an estimated £3.4b of additional expenses, not least because of the increase in employers’ National Insurance contributions. “Industry leaders have warned that potentially higher mandatory pension contributions for staff could be the final nail in the coffin for some companies,” Milner added.