‘Hanging by their fingernails’: Hospitality, construction hit hardest in 2024 as SA businesses struggle to stay afloat

More than 650 SA businesses went under last year, and a liquidator says companies are far from out of the woods. Search the full list

High rents, expensive electricity bills, and the ongoing cost of living has made things “worse than ever before” for South Australian businesses, and it’s not going to get better anytime soon.

Last year, more than 650 businesses went under in SA, some working through restructuring plans, many closed for good.

It is a well-known fact that the hospitality industry has been through the ringer in recent years, and it was no different in 2024, with 148 cafes, restaurants and takeaway services slipping into insolvency.

Michelle Lowe opened Cheffy Chelby in Port Noarlunga in 2020, but last year the business went into voluntary liquidation. Picture: Tom Huntley

On its heels was the construction industry, with a total of 102 companies going into liquidation, administration, or restructuring plans.

Matt Ormsby, a liquidator with SV Partners, said the numbers showed a continued trend over the last five years that hospitality and construction were among the most difficult sectors to keep afloat.

He said that last year’s insolvency rate was higher than previous, and South Australia was far from out of the woods with things only expected to get worse before they get better.

“Insolvency numbers are certainly higher than previous years, and that’s being driven by the ATO re-entering the market and clamping down on outstanding tax,” Mr Ormsby said.

AHA SA chief executive Anna Moeller said the hospitality has struggled since covid. Picture: Supplied.

Australian Hotels Association SA chief executive Anna Moeller said hospitality businesses were “hanging on by their fingernails” after “limping” out of covid, and by 2024 many had insurmountable debt.

That, paired with the ATO’s clamp down, meant that many businesses just “couldn’t hold on any longer,” Ms Moeller said.

“The hospitality industry limped out of covid and crashed headlong into a cost of living and operating crisis, which nobody expected,” she said.

“It’s affected cafes and restaurants more than hotels because hotels are able to have a broader business model — for restaurants they sell food and that’s the end, and for some of them it was.

“The same impacts for patrons are impacting businesses amplified; energy costs, insurance costs, cost of products, and then they also have wage increases and superannuation on top of that.”

In 2024, Big Shed Brewing struck a deal with creditors this week to keep operating, saving them from collapse. Owners Craig Basford and Jason Harris. Picture: Brett Hartwig

Mr Ormsby said there was light at the end of the tunnel for some businesses that could apply for the simplified debt restructuring scheme, which was introduced in 2021.

A total 181 businesses went through the restructuring process last year, and though some were unable to stay afloat, others have gone “along their merry way in a profitable enterprise,” Mr Ormsby said.

“There’s been a large uptake of companies entering the restructuring regime, and that has provided an opportunity for businesses to deal with their outstanding debts in a cost effective manner, while maintaining control, and then continuing to the future,” he said.

As of June 1, 336 businesses in South Australia have gone insolvent in 2025.

Originally published as ‘Hanging by their fingernails’: Hospitality, construction hit hardest in 2024 as SA businesses struggle to stay afloat