Financial distress in the travel and tourism sector has jumped 39% year-on-year, according to the latest Red Flag Alert from insolvency specialist Begbies Traynor.
It said ‘volatile’ consumer spending, global economic turbulence and rising taxes on businesses were to blame.
The report highlighted that nearly 50,000 UK businesses, across all sectors, were in ‘critical’ financial distress at the end of the second quarter of 2025, a 21.4% increase over the same period of 2024.
In addition to travel and tourism, other sectors experiencing increases in ‘critical’ financial distress are bars and restaurants, up 41.7% year-on-year, and general retail, up 17.8%.
Begbies Traynor Partner Julie Palmer said: “Financial distress has intensified over the past twelve months in every corner of the economy.
“This means businesses across the UK are facing significant headwinds and many will have to review where they can tighten their budgets or restructure to give themselves more stability in the immediate future.
“This time last year, there was a degree of optimism amongst business leaders who were hoping to see a shift in fortunes in the second half of the year, but fast-forward 12 months and confidence is in short supply.
“Households are still grappling with their finances, and this is keeping consumer confidence volatile. The knock-on effect of this is clear to see in the consumer-facing sectors where margins are thin, growth is hard to come by, and the impact of higher employee costs is pushing many businesses to the brink of collapse.”
