UK Hospitality Collapses Remain High After 3,353 Hit Wall in 2025

The number of hospitality businesses entering insolvency eased very slightly in 2025, yet remained historically high, reflecting challenging trading conditions for the industry.

Some 3,353 accommodation and food service companies, including hotels, restaurants and pubs, closed in the twelve months to December 2025, down 3.2 % from 3,465 for 2024, according to government data. Q4 saw a 2.4% improvement over Q3, with 786 companies in trouble.

Offering little cheer, apart from December, the number of monthly hospitality insolvencies has remained consistently over 220 during this year.

The Buchler Phillips Hospitality Index of insolvencies, which has tracked monthly figures since January 2014, softened from 191.9 in September to 187.3 in December. It peaked in August 2023 at 273.4 with a spike in the sector’s business closures.

High profile operators that entered the insolvency process in Q4 include Bistro Live (pre-pack sale), Leon Restaurants (trading in administration, with closures), Sri Lankan eateries The Coconut Tree and Pizza Hut franchisee DC London (administration, closures and partial sale).

Jo Milner, Managing Director of the leading turnaround and restructuring firm, said:

“There is no sign of hospitality budging from near the top of the insolvency table in the foreseeable future. As last year’s budget changes kick in fully, even last minute government measures will provide little respite for the stricken sector.”

Hospitality businesses have faced an estimated £3-4bn of additional costs, not least because of the increase in employers’ National Insurance contributions. Industry leaders have warned of the need for operators to rise prices by 6% to 8%, against a background of already weak consumer spending.

More than three-quarters of a million hospitality employees have been shunted into employers’ NIC for the first time.