Company insolvencies in the accommodation and food services industry were down year-on-year and month-on-month in April 2025, according to newly released figures. However, insolvencies could be set to rise again after the industry saw a downturn in trade during May.
Insolvency statistics showed that there were 275 insolvencies in the industry during April 2025, a drop of 12 per cent from 313 in April 2024 and down 2.5 per cent from March 2025. In the year to April 2025, there were 3,339 insolvencies in the sector, down 12 per cent from 3,824 in the year to April 2024.
RSM UK partner and Head of Leisure and Hospitality Saxon Mosley said that the hospitality sector had seen a strong month during April, with “sunny weather boosting operators’ top line which translated into fewer insolvencies.”
However, trading figures from May suggest that April’s lower insolvency figures may prove to be just a temporary respite, with the CGA RSM Hospitality Business Tracker showing that sales fell 1.0 per cent year-on-year last month.
Following growth of 4.2 per cent in April, RSM stated that cooler and wetter weather across much of the UK had impacted trading in May, particularly over the two bank holiday weekends which typically boost sales.
May’s results now mean that sales recorded in the tracker have been negative for three out of the first five months of 2025, with Saxon Mosley saying that fragile consumer confidence “continues to weigh on the hospitality industry”.
Karl Chessell, Director - Hospitality Operators and Food, EMEA at CGA by NIQ, said that the results were “particularly concerning in the context of major increases in staff costs from April”, adding that “the Chancellor’s recent spending review brought little to reduce the heavy burden on hospitality businesses.”
The downturn in trade during May occurred at a time when hospitality operators continue to contend with inflationary pressures and persistent global uncertainty, leading Saxon Mosley to suggest that “we could see a return to higher levels of insolvencies in the coming months.”
Possible good news for the sector, however, could be that the UK has seen a hot and sunny start to the summer, raising hopes for stronger trading results over the key summer months, potentially helping to ease the financial challenges many operators are facing.
Saxon Mosley commented: “With consumer confidence continuing to improve and hotter weather in June, it’s hoped we’ll start to see this translate into more spending. The concern will be if inflation persists in areas that directly hits household budgets, this may delay any meaningful recovery in consumer confidence and future spend on eating and drinking out.”
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