Hospitality accounted for 12% of UK administrations in 2023

Hospitality administrations increased 22% last year compared to 2022, according to new data.

Analysis by full-service law firm Shakespeare Martineau put hospitality as the third-highest sector in the UK for administrations, with retail, construction, manufacturing and real estate all contributing to 59% of administrations, according to the data.

Hospitality accounted for 190 out of 1,641 businesses that filed for administration last year, marking a 22% increase compared to 2022 and 91% rise in comparison to 2021.

Shakespeare Martineau warned that with administrations nearing pre-Covid levels (1,794), the industry must be braced for further difficult trading periods with more businesses likely to fail over the coming year.

Andy Taylor, partner and head of restructuring at Shakespeare Martineau, said: "The significant uptick in the number of companies filing for administration in 2023 underscores the challenges faced by businesses amid changing consumer habits, financial pressures and geopolitical uncertainties.

"A shift in consumer buying habits, exemplified by a challenging January for the hospitality sector, adds to the narrative of subdued spending. Moreover, HMRC continues to be more active, with threatened enforcement pushing businesses towards considering their options, and many opting for administration as an alternative to being wound up on a compulsory basis.

"Many predict the rate of inflation to continue its downward trajectory in 2024, perhaps even approaching Bank of England's target of 2%. If that trend continues one might anticipate something like three interest rate cuts in 2024, which will hopefully stimulate growth."

January has bought with it a number of high-profile closures, including Tony Rodd's Copper & Ink in Blackheath, James Allcock's the Pig & Whistle in Beverley, and Phil and Deb Lewis' Kindle in Cardiff. Simon Rimmer's Greens restaurant also closed after 33 years of trading after facing a 35% hike in its rent.

Last week, Cheshire-based hotel group Flat Cap Hotels also announced that it was entering administration.

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