Hospitality stability under threat from wave of govt costs, UKH warns
The report indicates that a total of 98,866 sites were operating in March 2025, which was 0.1% more than 12 months ago
UKHospitality has warned that the hospitality industry’s stability is under threat from a new wave of government costs, after pubs, restaurants and hotels achieved marginal growth in outlets over the last 12 months.
It comes as CGA by NIQ and AlixPartners’ latest Hospitality Market Monitor indicated that a total of 98,866 sites were operating in March 2025, which was 0.1% more than 12 months ago. However, the latest quarter – January to March – saw numbers fall 0.3% from the end of 2024, which is equivalent to 20 net closures per week between those three months.
This contraction reflects concerns among operators and investors about soft consumer confidence, weak sales in venues and the general economic outlook, as well as the burden of increased employer NICs and national minimum wage.
Other key trends in openings and closures in the hospitality sector include a greater solidity on the managed side of hospitality than in the independent sector, with the two gaining and losing 0.3% of sites respectively in the first quarter of 2025.
There has also been similar churn in venue types, as food-led licensed premises shrank 1.1% while drink-led ones grew 0.3%.
The report also highlights growth areas of hospitality despite ongoing challenges, like the expansion of bars powered by competitive socialising concepts. There are now 2.8% more bars than at March 2020, which makes it the only segment to have grown in size since the start of the pandemic.
Kate Nicholls, chief executive of UKHospitality, said: “The loss of 20 venues a week so far this year shows the real-life impact of the increasing cost burden on hospitality. These are livelihoods, jobs and cherished community venues that have been lost for good, and that is hugely damaging to our economy, society, culture and wellbeing.
“Throughout last year, there had been some much-needed stabilisation and growth in the market, after several years of significant losses after the pandemic. The £3.4bn in costs hitting the sector has clearly sent that trend into reverse.”
