Mounting costs drive hospitality confidence to two-year low

By Andrew Catchpole

Published: 12 March, 2025

Hospitality business confidence has hit a low not seen since October 2022, when inflation peaked at a 40-year high.

The gloomy picture, highlighted by UKHospitality (UKH) from the latest CGA by NIQ’s Business Confidence survey, comes as businesses are about to be hit with an estimated additional £3.4 billion annual costs this April.

Only 14% of hospitality businesses reported that they were confident about the sector.

Read more: Drinks Trust wellbeing initiative sees positive first year

With upcoming change to employer NICs (National Insurance Contributions) accounting for £1 billion of those costs alone, UKH is calling for a delay in the reduction on the threshold at which employees fall into the new band for payment.

As it stands, the upcoming reduction in threshold will bring an additional 774,000 hospitality workers – some 20% of the sector’s workforce – within the threshold, delivering a further blow for the already hard-pressed sector.

UKH is also calling on Government for business rates reforms, to provide the maximum possible discount to hospitality businesses, to assist high street operators, while pressing for large hospitality businesses to be exempt from the surcharge.

Further calls include the creation of a hospitality growth strategy and action plan, with the proposed Apprenticeship Levy to be brought forward to assist the sector.

“Hospitality is facing a crisis of confidence like we haven’t seen since we were in a full-blown energy crisis and inflation was running at over 10%,” said UKH chief executive Kate Nicholls.

“The enormity of the cocktail of costs being simultaneously imposed upon venues is unprecedented and, for many, completely unsustainable. It will simply force businesses to cut jobs, freeze recruitment, cancel planned investment, reduce trading hours and, in the worst-case scenario, close their doors for good.”

The hospitality sector, which contributes £93 billion annually to the economy, generating £54 billion of tax for the Treasury, is key to the UKs economic growth, typically helping drive recovery from economic downturns. And, as the third largest employer in the UK, it drives significant receipts for the Treasury, while supporting 3.5 million jobs.

Printer friendly version