Increases to business rates and employment costs will once again cause job losses and hit business viability, the hospitality sector warns.
New member survey results from UKHospitality, the British Beer and Pub Association, the British Institute of Innkeeping and Hospitality Ulster reveal the damaging impact another year of significant cost increases will have on hospitality businesses.
As a direct result of today’s cost increases, businesses will cut jobs (64%), cancel investment plans (51%) and reduce trading hours (42%). Around one in seven venues (15%) will be forced to close.
The increasing cost of energy was also a significant concern. Even when surveyed prior to the situation in Iran and the Middle East, almost all businesses (93%) said energy costs were impacting profitability.
Hospitality is united on the measures that would allow their businesses to grow:
- VAT reduction for hospitality (89%)
- Reform of business rates (74%)
- Changes to employer National Insurance Contributions (65%)
The benefits of lowering hospitality’s tax burden are clear. Businesses would prioritise refurbishing and developing existing sites (70%), creating new jobs (46%) and opening new sites (27%). These are all measures that would drive economic growth and help people into work.
In a joint statement, the trade bodies said: “Yet again, hospitality businesses enter April facing billions of pounds in additional costs.
“Hospitality’s tax burden – the highest in the economy – is suffocating the sector. The impact is clear: more lost jobs, less investment and business closures. The jobs, communities and livelihoods we support are hit once again.
“The worrying situation facing the business energy market has the potential to accelerate all of these impacts.
“Even before the conflict in Iran and the Middle East began, increasing energy prices were already impacting profitability and the Government should be prepared to support vulnerable businesses if they are thrown into yet another crisis.
“Hospitality businesses are clear that cutting their costs through a lower rate of VAT, business rates reform or changes to employer NICs will deliver new jobs, investment and growth.
“The benefits of backing our local pubs, restaurants, hotels, leisure and tourism businesses are obvious. The Government should stop using the start of April as its annual payday from high street businesses, and support them instead.”
ENDS
Notes to editors:
- CGA by NIQ surveyed hospitality businesses in February 2025, with respondents operating more than 20,000 hospitality sites.
- For more information contact our Communications Manager Sam Ette on sette@ukhospitality.org.uk or Fleet Street Communications on ukhospitality@fsc.uk.com.
About UKHospitality:
UKHospitality is the leading trade body for hospitality, representing every corner of the sector. We represent more than 130,000 venues, from pubs, bars and restaurants to hotels, indoor leisure and contract catering.
We work on behalf of a sector at the heart of the everyday economy; contributing £93 billion annually to the economy, generating £54 billion of tax for the Treasury and employing more than 3.5 million people as the third largest employer in the UK.
Our members benefit from our dedicated campaigning to empower an environment for hospitality to thrive, in addition to expert insight, specialist support helplines and guidance on the key issues facing hospitality businesses.
About the British Institute of Innkeeping:
The BII is the leading independent licensee support organisation for individuals working in hospitality, with 13,000 individual members running premises across the UK - predominantly tenanted, leased, managed and freehold pubs. The organisation provides expert helplines, online business support, and guidance on key industry issues, and savings on a range of supply deals for its members, keeping pubs thriving in the heart of every community.
For further information please contact Molly Davis molly.davis@bii.org
About the British Beer & Pub Association The BBPA is the UK's leading trade association representing pubs and breweries. Our members brew over 90% of British beer and own over 20,000 pubs.
We are the voice of pubs and brewers, offering insight and policy thinking to government, political stakeholders and media alike to help ensure that there is an in-depth understanding of both the opportunities and challenges faced by the sector and the policy solutions to bring about the optimal fiscal and policy framework that will underpin a thriving pub and brewing sector in the UK.
The UK’s beer and pub industry supports over 1,000,000 jobs and £34.2 billion GVA to the UK’s economy each year.
For more information contact Anna Edwards: press@beerandpub.com
About Hospitality Ulster:
Hospitality Ulster is the trade body representing the hospitality industry across Northern Ireland. Sustaining 72,000 jobs and with a turnover more than £2bn, the hospitality industry is Northern Ireland’s fourth largest employer and the backbone of the tourism industry. Hospitality Ulster speaks on behalf of pubs, restaurants, coffee shops, hotels and businesses with a substantial hospitality offer within their core business.
For further information, please contact: enquiries@hospitalityulster.org