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Accommodation and food services insolvencies were down 7% year-on-year from 3,737 in 2023 to 3,464 in 2024, according to data from the Office for National Statistics (ONS).
Insolvencies in the sector saw an even bigger drop month-on-month, down 31% from 327 in November 2024 to 224 in December 2024 and fell 29% when compared to the same month in the previous year (315).
Overall, the number of registered company insolvencies in England and Wales was 1,971 in January 2025 after seasonal adjustment, 6% higher than in December 2024 (1,852) and 11% higher than the same month in the previous year (1,780 in January 2024).
Company insolvencies in January 2025 consisted of 269 compulsory liquidations, 1,546 creditors’ voluntary liquidations (CVLs), 142 administrations and 14 company voluntary arrangements (CVAs). There were no receivership appointments.
CVL and administration numbers were higher than in December 2024, while compulsory liquidations and CVAs were lower.
Saxon Moseley, partner and head of leisure and hospitality at leading audit, tax and consulting firm RSM UK, said: “Food and accommodation insolvencies in December fell to their lowest level in over two years, providing a welcome Christmas gift for the sector. For some operators, December would have been the last roll of the dice to take advantage of the festive trade and build up a war chest of reserves.
“However, there’s caution ahead, as operators try to juggle fragile consumer confidence, plus a deluge of upcoming tax and regulatory changes which are set to see operating costs surge. Struggling businesses may have been able to limp through the busiest month of the year in December but with cost increases on the horizon, some may be weighing up their options.”
He added: “With real wages now growing at 2.5% – the fastest rate in four years – this should eventually feed through to higher household consumption and provide a boost to the hospitality industry. Businesses that can hold on and weather the storm of National Insurance rises will reap the benefits of an uptick in consumer spending which is expected to come later this year.”
