Survey reveals hospitality venues operating at only 85% capacity

By Hamish Graham

Published: 20 August, 2025

A new survey from leading hospitality trade bodies has revealed that 69% of businesses queried are operating at or below 85% capacity.

The data drawn from members of the British Institute of Innkeeping (BII), the British Beer & Pub Association (BBPA), UK Hospitality (UKH) and Hospitality Ulster also detailed that 73% of respondents have less than six months’ worth of cash reserves, with a concerning 1-in-5 having no cash reserves at all.

The survey also showed that 79% have had to increase prises as a result of April’s cost rises, with over half of venues having cut staff numbers since then too. The total hospitality job losses since April’s changes to employer National Insurance Contributions (NICs) currently stands at 84,000.

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Additionally, insolvencies are on the rise for the worst-faring hospitality businesses, as yesterday’s Company Insolvencies Statistics revealed. For the accommodation and food services sector insolvencies rose once again by 4% from 296 in May to 307 in June, marking the highest monthly figure since November 2024.

A joint statement from the trade bodies lamented the policy landscape UK hospitality businesses are having to traverse.

They said: “This shocking data reinforces the urgent need for Government to recognise the incredible pressure hospitality businesses have been put under, particularly since April, and illustrates why it should come forward with measures to support this vital sector at the Budget.

“Unsustainable tax increases are squeezing businesses, stifling growth and investment, and threatening local employment, especially for young people.

“It is forcing businesses across the sector to make impossible decisions to cut jobs, put up prices, reduce opening hours and sadly limit the support they desperately want to give their communities.

“Hospitality is united in which measures will reverse this trend and drive growth: a reduction in VAT for hospitality, changes to employer NICs and permanently lower business rates for the sector.”

Amid the challenges facing hospitality, a new report from Lumina Intelligence revealed that “managed, branded and franchised operators” are performing comparatively well. They now account for over half of the hospitality market’s value despite making up just over 25% of the total sites.

These operators’ scale and access to investment are allowing them to make substantial estate enhancements, introduce premium concepts, as well as develop pubs with hotel rooms.

The targeted investment such businesses are receiving provides a decisive competitive advantage, putting them on a growth and profit trajectory. At the same time, however, this is placing pressure on smaller independent venues who cannot compete with this increasing financial clout amongst larger businesses.

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