Hospitality business insolvencies set to rise, expert claims

Salisbury-based Antony Batty & Company Ltd has urged hospitality business owners to be aware of potential warning signs arising from challenges arriving in April.

James Stares, a director at Antony Batty & Company, said: "Hospitality enters April 2026 in an already fragile position where insolvencies in pubs, restaurants, bars, and hotels remain well above pre-pandemic levels.

James Stares, director at Antony Batty & Company. (Image: Antony Batty & Company)

"An estimated 3,353 accommodation and food and drink businesses entered insolvency proceedings in the year to December 2025, and the pressure is not relenting, with the sector about to absorb another round of cost increases announced in the Autumn Budget 2025, including further wage rises, higher employer National Insurance contributions and changes to business rates as temporary reliefs come to an end.

"In a payroll heavy sector such as hospitality, this represents a perfect storm of economic and structural challenges."

Mr Stares emphasised the importance of early intervention.

He said: "It is therefore vitally important for businesses to be aware of the effects of these changes early and to act fast to protect their futures."

He identified several pressure points that could threaten the viability of businesses, including rising payroll costs, increasing business rates, reduced cashflow during quieter periods, difficulty maintaining repayment plans, and mounting pressure from HMRC, landlords and suppliers.

Mr Stares said: "For businesses already operating on thin margins, these pressures can build quickly and may show up first as persistent arrears or a growing reliance on short-term borrowing.

"If this is happening with your business, assistance should be sought as early as possible."

He explained that insolvency practitioners can often help long before formal proceedings become necessary.

Support could include cashflow reviews, payment prioritisation, creditor negotiations and Time to Pay arrangements with HMRC.

Mr Stares said: "Work can also be done with landlords and suppliers to agree revised terms or payment plans, and on restructuring options such as a Company Voluntary Arrangement to deal with unmanageable lease or debt commitments.

"Early advice and action can give operators more options and a better chance of stabilising the business, which in turn can make all the difference to its long-term survival."