Hospitality insolvencies rise as energy bills rocket
Figures show that 2,156 of hospitality firms became insolvent in the past 12 months, compared to 1,354 businesses the year before.
The number of operators filing for insolvency was particularly acute in August with 216 insolvencies of pubs, bars and restaurants registered, up 37% from 158 in July.
In total, UK company insolvencies have increased by 72% in the past year, from 11,949 to 20,512, reports international audit, tax and advisory firm Mazars.
“Many UK businesses were already in a weak position before energy prices surged,” says Adam Harris, a partner at Mazars.
“The size of energy price rises was always likely to cause some businesses to close but the scale and pace of these insolvencies is especially concerning.
“Small business owners in particular are struggling under the weight of multiple crises, often without the resources or financial cushion to see them through.”
Harris notes that the hospitality sector is facing an unusually challenging environment as the cost-of-living crisis hits businesses from both sides.
“Just as their energy costs spiral and their interest costs rise, their customers are cutting spending on non-essentials such as eating out,” he continues.
“The Government’s upcoming energy package will be key to determining whether many businesses survive. Unless the picture dramatically changes, we are likely to see many more businesses close their doors in the months to come.”
Prime Minister Liz Truss announced last week that businesses are to get a six-month support package to reduce their energy bills, with details on how the financial aid will be delivered to businesses now expected to be unveiled during a mini-budget next Friday (23 September).
