Hospitality trade bodies have warned that increased employment costs and business rates effective this April will result in job losses for 64% of sector businesses surveyed.

Data from a joint survey by UKHospitality, the British Beer and Pub Association, the British Institute of Innkeeping, and Hospitality Ulster indicates that 51% of operators will cancel investment plans due to rising overheads. 

Additionally, 42% of businesses intend to reduce trading hours, while 15% of venues anticipate closure. 

Despite some targeted business rates support for pubs, independent restaurants and hotels face significant increases in statutory costs. 

The sector reports that energy prices remain a primary concern, with 93% of respondents stating that utility costs are currently impacting their overall profitability.

The industry is calling for structural tax reforms to mitigate these pressures, specifically citing the UK’s hospitality tax burden as a barrier to growth. 

Proposed measures include a reduction in VAT for the sector (89%), permanent reform of the business rates system (74%), and adjustments to employer national insurance contributions (65%). 

Operators indicate that a reduction in these costs would allow them to prioritise the refurbishment of existing sites (70%), the creation of new positions (46%) and the opening of new sites (27%). 

The survey, conducted by CGA by NIQ, represents more than 20,000 hospitality sites across the United Kingdom.

In a joint statement, the trade bodies noted that the current geopolitical situation in the Middle East has the potential to further destabilise the business energy market. 

They urged the government to prepare support mechanisms for vulnerable businesses should energy prices escalate further. 

The sector emphasises that lowering the tax burden would not only protect existing livelihoods but also drive high street regeneration. 

Without intervention, trade leaders expect a continued trend of business failures and a reduction in the sector’s total economic contribution during the 2026 fiscal year.

The trade bodies said in a joint statement: “Hospitality businesses enter April facing additional costs, which will force many to make decisions. Despite support for pubs on business rates, restaurants, hotels and cafes face their bills rising. Hospitality’s tax burden is impacting the sector. 

“The impact is clear: lost jobs, less investment and business closures. The situation facing the business energy market has the potential to accelerate these impacts. Increasing energy prices were already impacting profitability and the government should be prepared to support businesses. Cutting costs through a lower rate of VAT, business rates reform and changes to employer national insurance will deliver jobs, investment and growth.”