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Nearly a third of hospitality accounts show a deficit
Across 47,775 sets of accounts from restaurants, pubs, takeaways and hotels, 28.2 per cent reported liabilities larger than assets.
Hospitality files worse accounts than almost any other part of the economy. Across 90 publishing days and 47,775 filings from the industry, 13,470 reported liabilities larger than assets. That is 28.2 per cent, against 17.4 per cent across every company on the register.
Key points
- Hospitality runs at 28.2 per cent in deficit against a 17.4 per cent average.
- Unlicensed restaurants and cafes is worst at 31.6 per cent.
- The group covers 47,775 filings across 90 publishing days.
The industry, line by line
Every classification in the group, ranked by how many accounts it filed.
| Classification | Accounts | In deficit |
|---|---|---|
| Take-away food shops and mobile food stands | 12,051 | 26.7% |
| Licensed restaurants | 9,830 | 30.8% |
| Unlicensed restaurants and cafes | 7,988 | 31.6% |
| Public houses and bars | 6,104 | 29.5% |
| Hotels and similar accommodation | 4,518 | 24.1% |
| Event catering activities | 4,130 | 22.2% |
| Other holiday and other collective accommodation | 3,154 | 28.2% |
Why hospitality sits where it does
Restaurants and pubs are leasehold businesses with heavy fit-out costs and thin margins. The fit-out is spent before a customer arrives, and it is frequently funded by a director loan or a brewery tie that sits on the balance sheet as a liability for years afterwards. A deficit in this industry is often the cost of opening rather than evidence of failing.
That does not make the number meaningless. It means the industry carries less slack than most, and the same shock puts more of it under water.
What this does and does not mean
A deficit here means the accounts reported liabilities larger than assets at the balance sheet date. It is not insolvency. Companies funded by a parent or by director loans routinely report negative net assets while paying everything they owe, which is why this reports groups rather than naming companies.
Companies House does not verify the information filed with it. Everything here is what companies reported about themselves.
What happens next
Hospitality files in large enough volume to track monthly. We will report when the rate moves, and against which part of the industry.
How this was produced. Companies House publishes the accounts registered with it as open data each working day. Cap News downloads that file, reads the tagged figures out of each filing and joins them to the company register. Nothing here is hand picked. The method sets out what is counted and what is not.