Home Business News Hospitality sector is experiencing a ‘significant increase’ in businesses going bust

Hospitality sector is experiencing a ‘significant increase’ in businesses going bust

1st May 24 10:38 am

A recent report produced by Shakespeare Martineau for the Night Time Industries Association has shown that the hospitality and night time economy sectors in the UK have experienced a significant increase in businesses going into administration.

These statistics underscore the challenges faced by businesses within the hospitality industry over the past year.

Comparing the first quarter of 2023 with the same period in 2022, there has been a notable rise in administrations.

In January-March 2023 administrations accounted for 9% of all administrations during that time frame.

This is a stark contrast to administrations recorded in January-March 2022, comprising only 4% of all administrations.

The year-to-date data for April 2023-March 2024 paints a concerning picture, with 193 administrations in the hospitality and night time economy industries, accounting for 11% of all administrations. This demonstrates a significant increase compared to the previous year, where there were 74 administrations between April 2022 and March 2023, representing 5% of all administrations.

A monthly breakdown of the 2023-2024 data reveals fluctuations throughout the year, with peaks in October 2023 (39 administrations) and January 2024 (20 administrations). These figures indicate the volatile nature of the industry and the challenges faced by businesses operating within it.

Of particular concern is the position of the hospitality sector relative to other industries. In the first quarter of 2024 (January-March), hospitality emerged as the fifth worst-hit sector, following retail, manufacturing, real estate, and construction.

These statistics highlight the urgent need for support and intervention to safeguard the future of businesses within the hospitality industry. Shakespeare Martineau remains committed to providing legal expertise and guidance to support businesses navigating these challenging times.

Michael Kill, CEO of NTIA, asserts, “Navigating through highly unstable political climates, we must acknowledge the deteriorating conditions at the coalface of the hospitality and night time economy sectors, and more importantly the true human impact on people’s livelihoods.

“With industries grappling with escalating expenses, the recent dip in inflation only marginally alleviating the cost burden. It’s imperative that we intensify our efforts to urge the Government and the Chancellor to bolster the industry through fiscal measures, notably by implementing a VAT cut, which would provide much-needed financial relief for the entire nation.”

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