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The hospitality industry accounted for 10% of administrations in 2024 – the fourth highest sector in the UK – according to analysis by full-service law firm Shakespeare Martineau.
A total of 1,718 businesses, 172 of which came from the hospitality sector, filed for administration – marking a 28% and 5% increase compared with 2022 and 2023 respectively.
Retail, construction, hospitality, manufacturing and real estate were the worst-hit sectors for the second year in a row, collectively accounting for 55% of the 1,718 administrations.
Regionally, Greater London led the way with 23% of the filings, followed by the North West (14%) and the South East (11%), data from The Gazette Official Public Record has revealed.
Andy Taylor, partner and head of restructuring at Shakespeare Martineau, said: “In 2025, businesses across the UK will face an increasingly challenging environment, with a perfect storm of factors threatening to push more companies toward financial difficulty.
“Prolonged periods of difficult trading, exacerbated by geopolitical tensions and the impact of new tax burdens introduced in the latest budget, will intensify the pressures many businesses are already grappling with. The increase in national insurance contributions, coupled with the lower threshold for payments, will stretch cash flows for companies that are already operating on razor-thin margins.
“Labour-intensive sectors, such as retail, hospitality and construction are particularly vulnerable as they often struggle to absorb rising overheads and additional costs.In addition to these financial pressures, many businesses are still dealing with the aftermath of the pandemic, inflationary costs and supply chain disruptions, which have left them more fragile and less able to weather the storm.”
He added: “As we saw in 2024, sectors like retail, hospitality and manufacturing were hit hardest, and there is a real risk that without targeted support, more businesses will be forced to make difficult decisions, including cost-cutting measures, layoffs or even closure.These pressures are only compounded by the uncertainty in the global economy, which has already led to weakened consumer confidence and subdued spending. While many experts predict a potential easing of inflation in 2025, the overall landscape remains unpredictable.
“It is crucial businesses do not bury their heads in the sand and ignore the signs of distress. Proactively assessing financial health, engaging with advisors early and taking steps to mitigate risks will be vital in navigating these turbulent times.Our advice remains consistent: seeking professional advice as soon as financial challenges become apparent opens up more options and can dramatically increase the chances of survival in what will likely be another tough year ahead.”
