One in five hospitality businesses fear they could collapse within the next year, according to a recent industry survey released just days before a wave of cost increases takes effect.
From 1 April, pubs, restaurants and hotels will face higher business rates alongside increases to the national living wage and minimum wage. These changes are adding significant pressure to already tight margins and weakening confidence across the sector.
The survey, covering operators responsible for more than 20,000 venues, found that 44% of respondents feel pessimistic about the year ahead. Around 17% are currently trading at a loss, while 2% say their businesses are already unviable.
Cost pressures are expected to intensify further. Energy prices have risen following recent geopolitical tensions, increasing the risk of higher utility bills for businesses without fixed contracts. At the same time, food and drink costs continue to climb, while consumers face reduced spending power.
Employment costs remain the primary concern. Industry body, UKHospitality, estimates that wage increases alone will add £1.4 billionto the sector’s annual costs. Business rates are also set to rise sharply, with the average hotel in England expected to pay around £28,900 more this year, a 30% increase. Restaurants face an average rise of £1,800, equivalent to 15%.
Although relief measures have been introduced, including capped increases and a 15% discount for pubs alongside a two-year freeze, many operators warn that these steps may not be enough to prevent closures without further support.
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