The latest Business Confidence Survey from CGA by NIQ and Sona has revealed just 34 percent of leading UK hospitality operators are confident of the next 12 months, with 91 percent concerned over higher wage bills and a third reporting a year-on-year decline in revenue for the most recent quarter.

The most recent Business Confidence Survey from CGA by NIQ and Sona has found that confidence among UK hospitality leaders remained flat this quarter, with just 34 percent optimistic about the next 12 months, a figure one percent up on Q1 but 19 percentage points lower than in May 2024.

Following April’s increase in Employer NICs and the NMW, 91 percent of respondents said they were concerned over rising wages, 73 were troubled by increased business rates, and 61 percent were facing difficult decisions over the rising cost of food and drink, while customers continue to spend less.

“Confidence has been damaged further by cautious consumer spending in 2025 after a strong end to 2024,” states the report. “A third (34 percent) of leaders say their first-quarter revenue fell year-on-year – nearly as many as the 37 percent recording an increase. This is in line with the CGA RSM Hospitality Business Tracker, which indicated negative or fractional growth in each of the first three months of this year.”

“Mounting costs have strained businesses’ margins, and nearly a third (31 percent) of leaders say their profits have fallen year-on-year. Just over a fifth either operated at a loss (15 percent) or broke even (6 percent) in the first quarter – triple the number of 5 percent in the last quarter of 2024.”

Despite 57 percent of businesses reporting that energy bills have finally decreased, 65 percent have been forced to reduce staff numbers, 40 have deferred wage rises, and 29 percent have reduced spending on employee benefits and training in order to slow outgoings elsewhere.

“The double whammy of higher costs and softer trading have hit hospitality businesses hard, and it’s no surprise that confidence is running low,” said Karl Chessell, director of hospitality operators and food, EMEA at CGA by NIQ. “It is particularly frustrating that so many of the increases in employers’ outgoings – from labour bills to taxes to inflation to compliance with legislation – are out of their control.” 

“These costs are choking hospitality businesses and compromising the investment and employment that are so important to the UK economy. The longer term outlook for the sector remains good, but it deserves much better support than it is currently getting.”