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UK hospitality insolvency remains high despite easing in Q3 2024
Monthly hospitality insolvencies have remained consistently over 260 during this year.
The UK hospitality sector saw a slight drop in insolvencies in Q3 2024, yet levels remained high, reflecting challenging trading conditions for the industry, according to Buchler Phillips Hospitality Index (BPHI).
Moreover, according to government data, 2,657 accommodation and food service businesses, including hotels, restaurants, and pubs, have closed in the nine months to September 2024, slightly fewer than the 2,715 closures during the same period last year.
The number of monthly hospitality insolvencies has remained consistently over 260 during this year.
Furthermore, the BPHI of insolvencies has softened to 186.4 in September from 231.6 in June. It peaked in August 2023 at 273.4 with a spike in the sector’s business closures.
Companies falling into administration during Q3 included pub owner Antic Hospitality Group in July, Birmingham’s Cube Hotel in August, and the UK operator of TGI Fridays in September, with the loss of more than 1,000 jobs.
“Hospitality has always been a tough business, and in the current climate, any short-term easing in the insolvency figures shouldn’t be seen as a sign of sunlit uplands for the sector,” said Jo Milner, managing director of Buchler Phillips. “Recent budget changes won’t have helped.”
Hospitality businesses are expected to incur an additional £3.4b in costs, partly driven by the increase in employers' National Insurance contributions.
The report also noted that industry leaders have warned of the need for operators to raise prices by 6% to 8%, against a background of already weak consumer spending.
