Over three-quarters of UK hospitality businesses at risk of insolvency

By James McAllister

- Last updated on GMT

Over three-quarters of UK hospitality businesses at risk of insolvency UKHospitality Coronavirus lockdown

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More than three-quarters of hospitality businesses in the UK are at risk of falling into insolvency within the next 12 months, according to UKHospitality.

A survey by the trade body, carried out in partnership with CGA, shows that one in five are at significant risk of insolvency, or expect insolvency, within a year.

More than half of businesses believe there is a slight risk; while fewer than one-quarter of hospitality businesses are facing no risk.

The research further highlights scale of crisis facing hospitality sector as it attempts to recover following the Government-mandated lockdown of the industry.

UKHospitality warns that unless further 'decisive support' is provided by the Government, many businesses will face ruin and hundreds of thousands of jobs will be lost.

“These new figures underline the scale of the impact of COVID-19 on our sector and paint a truly stark picture of its immediate future," says UKHospitality chief executive Kate Nicholls.

“Over three-quarters of businesses in a sector which, pre-COVID, employed more than 3 million people, have some risk of insolvency within a year. Worryingly, over 20% are looking at a serious risk of insolvency or are now expecting it to happen. This is a truly desperate position to be in.

“The future of this sector, which provides jobs in every region of the country and is central to our social lives, has never looked shakier.

“The support the Government has provided has been crucial in ensuring that many businesses have survived the initial shock of lockdown and stimulated a return of some demand. 

"Without further support, however, we are going to see more and more venues going out of business and people continue to lose jobs.

“This means we need to see an extension of the business rates holiday and VAT cut, employment support for those businesses unable to open and financial support on rent. 

"Otherwise, we are going to see businesses fail and jobs lost just as the economy begins to reopen.”

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