"Most hospitality operators held on at the end of last year to capitalise on Christmas trading, before having to assess their options in January. The persistent wet weather and fragile consumer confidence has meant it's been a tough start to the year for the industry, with the NIQ RSM Hospitality Business Tracker showing flat like-for-like sales, tipping some into insolvency."
"The hospitality sector consistently features in the top three industries experiencing the highest number of insolvencies, highlighting it's one of the hardest hit by relentless cost increases such as higher taxes, National Minimum Wage and inflation."
"While it's encouraging to see a drop in hospitality insolvencies year-on-year, this may be in part due to the sector shrinking overall, as the challenging trading environment makes it difficult to not only enter the market, but to compete."
The accommodation and food services sector recorded 223 insolvencies in January 2026, a 9% increase from December 2025's 205 cases. However, this represents an 18% decline compared to January 2025's 273 insolvencies, suggesting underlying resilience. The sector faces persistent challenges including rising costs, wet weather, and fragile consumer confidence, resulting in flat like-for-like sales. Hospitality consistently ranks among the top three industries with highest insolvencies due to relentless cost increases from higher taxes, minimum wage, and inflation. The year-on-year improvement may partly reflect overall sector contraction as difficult trading conditions deter market entry and competition. Operators must prioritize cash preservation, cost reduction, and customer experience maintenance.
#hospitality-insolvencies #economic-pressures #sector-resilience #cost-management #consumer-confidence
Read at London Business News | Londonlovesbusiness.com
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