According to Government statistics, hospitality insolvencies recorded in October stood at 253, the lowest monthly level in two years.
By contrast, some 332 insolvencies were recorded across the sector in October 2023.
In addition, insolvencies in the sector saw another month-on-month decrease, falling from 261 in September.
“An early Christmas present for operators as insolvencies hit the lowest level in two years and continued a downward trend since the summer,” says Saxon Moseley, partner and head of leisure and hospitality at RSM UK.
“With the festive trading period well underway, operators will be hoping to build up some reserves to help mitigate the impact of looming cost increases.”
Moseley notes that the industry is bracing for a wave of post-Budget headwinds with employment costs increasing and additional compliance changes under the Employment Rights Bill.
“For vulnerable businesses already struggling to make ends meet, this could well be a step too far and we expect to see an uptick in insolvencies across the industry next year as a result,” he continues.
“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.
“In addition, as further pressure is applied, distress deals will drive a further wave of consolidation in 2025.”
