Insolvencies in the hospitality sector hit two-year low
Insolvencies dropped by 24% to 253 in October.
The accommodation and food services insolvencies decreased by 24% to 253 in October 2024 compared to 332 in October last year, according to RSM UK.
“An early Christmas present for operators as insolvencies hit the lowest level in two years and continued a downward trend since the summer,” said Saxon Moseley, partner and head of leisure at RSM UK.
Insolvencies in the sector also saw a month-on-month decrease to 253 in October from 261 in September.
“The industry is bracing for a wave of post-budget headwinds with employment costs increasing and additional compliance changes under the Employment Rights Bill,” Moseley said.
He also added that for already struggling businesses, this may be too much to handle, potentially leading to a rise in industry insolvencies next year.
“This backdrop will create consolidation opportunities for operators looking to strengthen market position through strategic acquisitions and bring efficiencies to respond to the budget measures,” Moseley said.
“In addition, as further pressure is applied, distress deals will drive a further wave of consolidation in 2025,” he added.
