Research
UK hospitality company insolvencies rose 117.6% between 2016 and 2025
A sourced, monthly read on hospitality company insolvencies across the UK, drawn from Insolvency Service public records, paired with ONS business survival data by birth cohort. Covering all SIC Section I hospitality businesses. Updated Jun 2026.
Key findings
- Hospitality insolvencies rose 117.6% from 1,678 in 2016 to 3,652 in 2025.
- In the trailing 12 months to Jun 2026, 3,523 hospitality companies entered insolvency across England, Wales and Scotland.
- Creditors Voluntary Liquidation (CVL) is the dominant procedure in every year tracked, reflecting how often directors choose voluntary wind-up over a creditor-forced compulsory liquidation.
- The 2022 to 2023 surge followed the end of pandemic-era insolvency restrictions (the Corporate Insolvency and Governance Act 2020 temporarily prohibited winding-up petitions), compounded by post-pandemic cost inflation across food, energy and staff.
- Survival tells a more nuanced story: of hospitality enterprises born in 2019, 38.1% were still active five years later, close to the 38.4% all-industry average. High company insolvency volumes and roughly average business survival are not contradictory: insolvency counts events at existing companies, while survival tracks whether the enterprise itself is still registered, regardless of how it changed along the way.
Source: Insolvency Service, Company Insolvency Statistics (record-level data) and ONS Business Demography, both under the Open Government Licence v3.0. England, Wales and Scotland (insolvency); UK (survival). Figures may be cited with attribution to Hospitality Tax.
Hospitality insolvencies by year
Each bar shows the total number of hospitality company insolvencies registered in that calendar year (complete years only). The rise from 2022 reflects the unwinding of the pandemic-era moratorium on winding-up petitions, layered on top of sharp cost inflation.
The monthly trend by procedure
The stacked area chart shows monthly insolvency registrations from January 2016, broken down by the three main procedures: CVL, compulsory liquidation, and administration. CVL dominates throughout. The narrowing of the compulsory band during 2020 to 2021 is the direct effect of pandemic-era restrictions on winding-up petitions.
Breakdown by procedure
The table shows the number of hospitality company insolvencies by procedure type in 2025.
| Procedure | 2025 count | % of total |
|---|---|---|
| Creditors Voluntary Liquidation (CVL) | 3,082 | 84.4% |
| Compulsory Liquidation | 440 | 12.0% |
| Administration | 102 | 2.8% |
| Company Voluntary Arrangement (CVA) | 16 | 0.4% |
| Administrative Receivership | 0 | 0.0% |
| Total | 3,652 | 100% |
How many hospitality businesses survive, and for how long?
ONS Business Demography tracks each year's cohort of newly born enterprises and reports what share are still active 1, 2, 3, 4 and 5 years later, by broad industry group. "Accommodation and food services" is ONS's own grouping for SIC Section I, so this maps directly onto the hospitality sector with no proxy or estimation involved.
| Birth cohort | Births | 1yr | 2yr | 3yr | 4yr | 5yr |
|---|---|---|---|---|---|---|
| 2019 | 28,790 | 94.2% | 76.8% | 60.7% | 47.9% | 38.1% |
| 2020 | 25,185 | 94.9% | 74.1% | 55.6% | 42.7% | n/a |
| 2021 | 30,965 | 94.6% | 72.9% | 50.2% | n/a | n/a |
| 2022 | 28,550 | 93.4% | 67.8% | n/a | n/a | n/a |
| 2023 | 28,800 | 93.9% | n/a | n/a | n/a | n/a |
Blank cells mean that many years have not yet elapsed for that cohort (ONS has not yet published the figure). Cohort = enterprises first registered as active in that year.
Methodology and sources
Insolvency data. Counts are drawn from the Insolvency Service record-level data file, published monthly as part of the Company Insolvency Statistics release on gov.uk. Each record represents a single insolvency event registered with Companies House or the Insolvency Service, tagged with the company's SIC code and procedure type. We filter to SIC 1-digit Section I (Accommodation and food service activities), covering Division 55 (accommodation) and Division 56 (food and beverage service activities).
What is counted. Each figure is the number of insolvency events registered in that period, not the number of unique companies. A company that enters administration and subsequently converts to CVL appears twice: once for each procedure.
Survival data. ONS Business Demography Table 4.2 tracks each year's newly born enterprises by broad industry group and reports the count and percentage still active 1 to 5 years later. "Accommodation and food services" is the ONS broad industry group that corresponds to SIC Section I.
Caveats. Insolvency counts are not rates: an increase may partly reflect growth in the total number of active hospitality companies rather than a worsening of sector conditions. The pandemic years (2020 to 2021) are not comparable to other years because temporary legislation suppressed compulsory liquidations. Survival tracks whether the enterprise remains active on the register, not whether ownership, name or trading activity changed; a company insolvency and a business "surviving" are measuring different things and are not directly reconcilable figure-for-figure.
Updated. Insolvency data through Jun 2026. Survival data from the ONS Business Demography release covering cohorts 2019 to 2023. Generated Jul 2026.
- Company Insolvency Statistics -- Record-Level Data (The Insolvency Service)
- Business Demography, UK -- Table 4.2 (Survival by broad industry group) (Office for National Statistics)
Download the insolvency data (CSV)
Free to cite and republish with attribution to Hospitality Tax. This page is a data summary and does not constitute insolvency or tax advice on any individual situation.
Running a restaurant, pub or hotel? Keep the cash position ahead of the risk.
High insolvency rates in hospitality are driven by margin, cash flow and fixed-cost pressure, not just bad luck. Understanding your VAT position, staff cost structure, and tax planning is a practical buffer against the conditions that push comparable businesses under. Our team works exclusively with UK hospitality operators.
Frequently asked questions
What does the UK Hospitality Insolvency Index measure?
It counts company insolvencies registered each month under SIC Section I (Accommodation and food service activities), drawn from Insolvency Service record-level data covering England, Wales and Scotland. Section I covers restaurants, cafes, takeaways, pubs, bars, hotels and other accommodation. The index tracks the main procedures: Creditors Voluntary Liquidation (CVL), compulsory liquidation, administration, Company Voluntary Arrangement (CVA), and administrative receivership. Counts are gross registered events on the date of registration.
Why does hospitality have such a high insolvency rate?
Hospitality businesses run on some of the thinnest margins of any UK sector, combined with fixed costs (rent, business rates, staff rotas) that do not flex down quickly when trade drops. Food and drink cost inflation, the post-pandemic rise in the National Living Wage and employer NIC, and high energy costs for kitchens and refrigeration have all compressed margins further. Section I (accommodation and food services) has consistently ranked among the top few sectors for company insolvencies in Insolvency Service statistics.
What is a Creditors Voluntary Liquidation (CVL)?
A CVL is the most common insolvency procedure in hospitality. The company's directors resolve to wind up the business voluntarily when they conclude it cannot pay its debts, and a licensed insolvency practitioner is appointed as liquidator to realise assets and distribute proceeds to creditors. CVLs consistently account for the large majority of hospitality insolvency events tracked here.
How many hospitality businesses started in 2019 are still trading?
Based on ONS Business Demography data, 38.1% of hospitality (accommodation and food service) enterprises born in 2019 were still active five years later, against an all-industry average of 38.4%. Survival tracks whether the enterprise is still registered as active, not whether it changed hands, was renamed, or restructured.
Where does this data come from?
Insolvency counts come from the Insolvency Service's record-level data file, published as part of the Company Insolvency Statistics release on gov.uk, updated monthly. Survival rates come from the Office for National Statistics' Business Demography release, published annually, which tracks cohorts of newly born enterprises by broad industry group for up to five years. Both are published under the Open Government Licence v3.0.