The hospitality sector will continue to experience a high proportion of insolvencies throughout 2026 with businesses struggling with legacy debt, difficulty attracting and retaining staff, and high costs, in particular for energy, Deloitte has said.
Data published by the professional services firm on Wednesday showed 213 corporate insolvency appointments were recorded in the first quarter of the year, which marks a 3 per cent year-on-year rise.
Deloitte Ireland turnaround and restructuring partner James Anderson said there are early indications retail sector insolvencies are up, while hospitality has experienced a decrease. He said a VAT rate cut is “unlikely to reduce insolvencies in this sector”.
Nearly half of insolvencies were from the wide-ranging services sector. Within that, financial services (29), holding companies (17), and property (16) accounted for the highest number of insolvencies.
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Early indications suggest retail sector insolvencies are up, totalling 30 – or 14 per cent – of insolvencies.
Ahead of the July 2026 scheduled VAT rate cut, hospitality insolvencies decreased by 27 per cent, with 24 hospitality businesses going insolvent. This compares to 33 in the first quarter of last year and 46 a year previous.
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“The hospitality sector is expected to continue to experience a high proportion of insolvencies for the remainder of 2026,” Anderson said.
“The VAT rate cut is unlikely to change this, as the challenges this sector face will continue, such as legacy debt issues, difficulty attracting and retaining staff, and high costs, in particular for energy.”
The remainder of insolvencies were spread among construction (9 per cent); IT (8 per cent); manufacturing and agriculture (6 per cent); other (4 per cent); transport (3 per cent); and wholesale (2 per cent).
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Creditors’ voluntary liquidations accounted for 70 per cent of the insolvencies in the quarter with a total of 149, which was a rise of 16 per cent.
“This represents a return to natural levels of company led closures, which have accounted for an average of 70 per cent of all insolvencies in the five-year period from 2021 to 2025,” Deloitte said.
The average age of the companies that entered voluntary liquidations was 14 years. Only 19 companies that entered voluntary liquidation were less than five years in business.
There were 30 court liquidations compared with 25 a year earlier. Revenue was the petitioner for half of these. Some 12 per cent were receiverships, which represented a 40 per cent decrease compared to a year earlier.
“This activity is back in line with first quarter 2024 levels, when there were 29 corporate receiverships,” said Anderson.
“Similar to first quarter 2025, alternative and international lenders are continuing to drive this activity. There were no pillar bank appointments.”
There were four examinership appointments and five small company administrative rescue process (SCARP) appointments.
Combined this represents 4 per cent of the total insolvency appointments. “This continues a trend of low level take up of rescue options that has remained consistent at about 4 per cent, despite the introduction of the SCARP process in 2022,” Anderson added.
