Hospitality sector continues to see elevated number of insolvencies during first half of the year, says Deloitte
A doubling of the number of court liquidations in the period, to 42, has been attributed to companies being unable to meet phased payment agreements with the Revenue Commissioners as part of the pandemic debt warehousing programme. Revenue was the petitioner to the courts in 27 of the 42 cases.
Deloitte said that corporate receiverships rose 37pc in H1, with significant activity by alternative lenders enforcing real estate-backed loans that have defaulted or matured without resolution.
The number of firms undergoing formal restructuring via examinership or via the Small Company Administrative Rescue Process (Scarp) has jumped 56pc in the first six months of the year compared to the first half of 2024, however.
The Deloitte report shows that the number of receiverships rose 37pc to 71 in the first half of the year. Most of those receiverships were initiated by alternative lenders.
The hospitality sector had 66 insolvencies in the first half of the year. That's down 14pc compared to the first six months of 2024, but remains elevated.
Hospitality venues that have entered insolvency processes in recent weeks include the company behind Captain Americas on Grafton Street in Dublin, and Dylan McGrath's Fade Street Social, also in the capital.
The hospitality sector has the highest number of insolvencies of any industry in Ireland when services are split into subsectors.
Restaurants are disproportionately impacted within this sector, due to legacy debt issues, difficulty attracting and retaining staff, and energy costs in Ireland being the most expensive in Europe, noted the report from Deloitte.
'Hospitality continues to experience a high number of insolvencies, despite the drop in 2025 so far,' said James Anderson, turnaround and restructuring manager at Deloitte Ireland.
He said the expected reintroduction of a 9pc Vat rate for the sector is unlikely to favourably impact the insolvency rate due to the sector's legacy issues.
There were just 14 appointments under Scarp in the first half of 2025, compared to seven in the first six months of 2024.
Scarp aims to facilitate simplified out-of-court debt restructuring for viable small companies.
But Scarp has not had the kind of traction that might have been expected since it was introduced in 2021. Just 99 appointments have been made under the system since then.
'Scarp has proven to be a successful process that saves companies and jobs,' said Mr Anderson. 'It is disappointing that awareness remains low despite a success rate of over 70pc. It is crucial that an awareness campaign is invested in, so more people are aware of it.'
He added: 'Even though insolvency numbers for the year to date are similar to 2024 levels, there are significant headwinds to consider for the rest of the year, with all the ongoing geopolitical and trade tensions.'
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