Newly released company insolvency statistics show accommodation and food service insolvencies increased 27% in the year to April 2024 (from 3,004 in the 12 months to April 2023, to 3,821 in the 12 months to April 2024) and were up 11% month-on-month in April 2024.
Saxon Moseley, head of leisure and hospitality at leading audit, tax and consulting firm RSM UK, comments:
“These insolvency statistics underscore the crippling challenges faced by the leisure and hospitality sector, as the cumulative impact of higher costs far outweighs the slower recovery of consumer confidence. April is the first month that operators have had to shoulder the increase in national minimum wage, putting a further squeeze on margins, and may have tipped some businesses over the edge.
“While the bigger picture shows insolvencies in the hotels and accommodation sector have increased annually, recent months show insolvency numbers are on a downward trend. This will come as positive news for hoteliers, particularly as we head into the traditionally busier summer months.
“Although consumer confidence is showing signs of improvement and individuals should start to feel like they have more money in their pocket as inflation eases, real wages grow, and interest rates come down, it’s clear the sector is desperately in need of support. Pressure remains on the next government to put business rates reform, reduced VAT and better access to skilled workers high up on the agenda in order to support this important area of the UK economy.”
