Number of hospitality company insolvencies up 59% in a year

The number of hospitality company insolvencies has risen by 59% over the past year amid spiralling cost pressures.

New figures from the Insolvency Service showed 2,156 pubs, bars and restaurants went insolvent in the 12 months until the end of July, compared to 1,354 the year before.

There were 216 insolvencies of hospitality businesses in July this year, up from 158 in June.

Data shared by audit, tax, and advisory firm Mazars showed a 72% increase in the number of overall UK company insolvencies in the past year, with 20,512 businesses shutting down.

Hospitality firms have warned they face a struggle to survive without help to tackle rising energy bills.

The government is expected to announce details of its £150b energy support package for households and businesses in an emergency budget on 23 September.

It has promised to backdate support for businesses from October if the scheme is not up and running in time.

Adam Harris, partner at Mazars, said: "Many UK businesses were already in a weak position before energy prices surged. The size of energy price rises was always likely to cause some businesses to close but the scale and pace of these insolvencies is especially concerning.

"Small business owners in particular are struggling under the weight of multiple crises, often without the resources or financial cushion to see them through.

"The hospitality sector is facing an unusually challenging environment as the cost-of-living crisis hits them from both sides. Just as their energy costs are spiral and their interest costs rise their customers are cutting spending on non-essentials such as eating out.

"The Government's upcoming energy package will be key to determining whether many businesses survive. Unless the picture dramatically changes, we are likely to see many more businesses close their doors in the months to come."

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