The UK hospitality industry contributes around 3% of GDP, underpinning a wide array of jobs and local economies. From bustling city restaurants to rural hotels, it is an important sector that drives employment and tourism in the country. Yet, despite its economic weight, the sector remains acutely vulnerable to fluctuations in consumer spending and policy shifts.

This vulnerability is reflected in recent insolvency trends. Insolvencies across the UK’s accommodation and food services sector dropped by 11% in Q1 2025. But despite these short-term gains, the sector continues to operate under pressure. Insolvency rates remain significantly above pre-pandemic levels, signalling that business failure has become a persistent feature in hospitality’s post-COVID landscape.

Much of this drop reflects a market correction. Over the past few years, weaker hospitality businesses either restructured or shut down entirely. What’s left are more resilient operators: those with leaner cost structures, stronger brands, or deeper financial backing. As the least viable players exit, the insolvency curve is starting to flatten.

Still, headwinds remain. Businesses are constantly battling the ongoing uncertainty driven by high inflation, low consumer confidence. Plus, increased employment costs have been biting harder since April. While discretionary spending is shifting toward retail and away from dining out, warmer weather and rising real wages could boost trade over the summer.

At the end of 2024, Price Bailey warned that more than one in ten UK restaurants faced imminent closure. That threat hasn’t disappeared. Labour’s Spring budget and other economic variables may yet accelerate the closure rate among already fragile businesses.

For now, the worst may be easing, but the industry is far from being out of the woods.

Rising Cuts, Declining Revenues and Low Confidence 

A flash survey of over 250 UK businesses in hospitality, events, and the night-time economy reveals more insights. Half the respondents said that the future to them seems bleak, with nearly 40% fearing permanent closure. Key drivers include unsustainable cost hikes (88%), falling footfall (78%), and a lack of government support (58%). 

Over 40% of these venues are planning job cuts, while more than half expect to raise prices again. This risks further customer loss. Despite visible activity in busy bars and venues, many have said they’re struggling to break even, hit hard by rising energy bills (up to 400%), higher national insurance, rent, and inflation.

Consumer habits have shifted post-pandemic, with reduced ticket pre-sales and declining weekday trade compounding the issue. Their current top demand and priority is a VAT reduction, supported by 64.4% of businesses, alongside calls for energy support, business rates reform, and fairer treatment from utility providers. 

Is there a Silver Lining?

Informed investors know the real story lies beneath: a high-volume shakeout is clearing space in oversaturated markets. We’re seeing prime hospitality and events businesses, many with fit-outs worth six figures, established licensing, and valuable supplier relationships enter administration not because of poor demand, but because of rising fixed costs and cash flow gaps. This creates a chance for acquisition at below-asset value, often with favourable restructuring terms.

Explore late-night venues in secondary Cities: 76% of surveyed businesses trade in the evening, and 62% through the night, yet night-time economy venues outside London and Manchester are disproportionately exposed to energy hikes and reduced late-night public transport access. These assets are often in rent arrears or entering CVAs. Look specifically at regional operators with established local followings but operational bloat. There’s opportunity in rapid restructuring and margin discipline.

Look for undervalued festival operators: Event-based hospitality venues (e.g. staging, pop-ups, mobile bars) are often goldmines. Many of these firms own modular kits that’s undervalued on paper but strategically vital to recovery-stage hospitality. Acquiring these B2B suppliers (or their inventory) gives optionality: rent, rebrand, or integrate vertically with venue portfolios.

Watch businesses with energy SIC code penalties: Being pushed into deemed energy contracts due to SIC classifications is often the breaking point for most businesses without extra capital. This can be used as a negotiation wedge during due diligence: assets with short-term cash flow crises due to distorted energy costs often become viable with nothing more than reclassification and switching providers.

Look for underperforming brands in Receivership: Several multi-site groups have placed branded venues into administration or sold IP post-liquidation (see: Byron, Prezzo). These legacy brands still carry digital traffic, customer recall, and newsletter lists. When acquiring businesses like these, it’s not about the units, but more about the brand equity to relaunch via dark kitchens or licensing models.

Insolvency News | The Comeback of TGI Fridays

TGI Fridays is gearing up for a major brand relaunch and repositioning after its acquisition out of administration by Breal Capital and Calveton in October 2024. The brand’s leadership team is working tirelessly to reverse the brand’s decline and redefine its market position. Wilkinson described the upcoming relaunch as “the comeback of all comebacks,” with a planned unveiling on 4 July to coincide with US Independence Day.

The turnaround process has been challenging, with Wilkinson acknowledging the difficult realities of restructuring. “TGI Fridays has had a tough time over the last few years,” he said. “We acquired the business out of administration in October, which was a tough decision.” The deal, which preserved 51 of the American restaurant chain’s sites, saw the closure of 36 locations and, later, two additional closures, including the flagship Leicester Square restaurant. Today, TGI Fridays operates 49 restaurants across the UK. The leadership emphasised that turning around such a large, well-known brand in today’s market is a monumental challenge, one that requires boldness, dedication, and resilience, though he remains optimistic about the team’s collective effort.

Insolvency News | Gino D’Acampo’s UK Restaurant Operator Acquired Out of Administration

The operator behind Gino D’Acampo’s UK restaurant chain, Upmarket Leisure, has been acquired out of administration in a deal that will save 400 jobs across five locations. The £5 million deal sees an undisclosed buyer take over the business, which includes the Luciano by Gino D’Acampo restaurant in London, as well as Gino D’Acampo-branded venues in Leeds, Liverpool, Newcastle, and Manchester. 

Upmarket Leisure had been struggling with mounting debts, leading to a winding-up petition from HMRC in March, after a previous attempt to sell the business fell through. Administrators at Begbies Traynor confirmed the prepack sale after an application for administration was made on April 29.

Dean Watson, partner at Begbies Traynor, expressed optimism, saying the acquisition provides the opportunity for the well-known restaurant group to continue operating under its existing brand and potentially thrive once again. Upmarket Leisure, which operated under the name Gino D’Acampo Hotels and Leisure until 2023, had seen founder Gino D’Acampo step down as a significant control figure in 2021. 

This sale comes at a challenging time for D’Acampo, who in February faced allegations of inappropriate behavior, which he has firmly denied, while ITV reportedly dismissed him following an investigation. Additionally, his My Pasta Bar brand in London went into liquidation in 2022 with debts of £5 million.