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The number of hospitality businesses entering insolvency eased very slightly in 2025 but remained at historically high levels, according to the latest Buchler Phillips Hospitality Index.
Approximately 3,353 accommodation and food service companies closed in the 12 months to December 2025, spelling a 3.2% decrease from 3,465 in 2024.
It comes as the fourth quarter showed a 2.4% improvement over the third, with exactly 786 companies entering insolvency.
Government figures analysed by Buchler Phillips showed that monthly figures remained consistently above 220 throughout the year, with the exception of 204 in December. Index results softened from 191.9 in September to 187.3 in December, having previously peaked at 273.4 in August 2023.
Several high-profile operators entered insolvency during the fourth quarter, including Leon Restaurants, which moved into administration to close 22 loss-making sites. Pizza Hut franchisee DC London also collapsed, resulting in 68 closures before 64 sites were rescued by Yum! Brands.
Bistro Live was acquired through a pre-pack sale by FM Hospitality in October, though the venues subsequently closed earlier this month.
Other affected businesses included the Sri Lankan chain The Coconut Tree as the sector continues to face significant financial headwinds.
Hospitality businesses have faced an estimated £3bn to £4bn of additional costs, largely due to the increase in employers’ National Insurance contributions. More than 750,000 employees have been included in these contributions for the first time.
In light of this, industry leaders have warned that operators may need to raise prices by 6% to 8% to counter these costs. This comes during a period of weak consumer spending.
Jo Milner, managing director of Buchler Phillips, 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.”
