A guide, not advice. This explains how things generally work. A licensed insolvency practitioner will tell you what applies to your company or to you.
Insolvency for Hospitality and Leisure
The hospitality and leisure sector - restaurants, pubs, hotels, cafes, and leisure operators - has faced acute pressure in recent years. Rising food and energy costs, staffing challenges, and changing consumer behaviour make this a demanding sector to navigate.
Our Manchester-based, ICAEW-licensed practitioners have experience helping hospitality businesses through financial difficulty.
Why Hospitality Businesses Fail
- Rising input costs - food, drink, and energy
- Staffing challenges and wage inflation
- Changing consumer behaviour and reduced discretionary spending
- High fixed costs - rent, rates, and utilities
- Seasonality and weather dependence
- Competition and over-supply in some areas
Sector-Specific Considerations
Rent and Business Rates
Hospitality businesses carry significant rent and rates liabilities. Arrears can build quickly, and landlords can forfeit leases.
Cash-Intensive Trading
Hospitality businesses are often cash-intensive, which creates particular record-keeping and tax compliance issues.
Asset Values
Fittings, equipment, and stock have limited second-hand value, which affects realisation in a liquidation.
Your Options
- Negotiation with landlords and suppliers
- CVA - restructure debts and rents while continuing to trade
- Administration - protection while the business is sold as a going concern, preserving the venue and jobs
- CVL - orderly closure where the business is not viable
Speak to a Licensed IP
Hospitality insolvencies need practitioners who understand the sector's cost pressures and the options for preserving a going concern. Our Manchester-based team will assess your position honestly and advise on the best route - free and confidential.