A new accounting of the membership of the UK’s three hospitality trade associations has laid bare the devastating impact of the 2024 autumn Budget, which sector chiefs say places business owners in an “impossible” situation. And the message is not encouraging: business costs are spiralling.
Nearly 80 per cent of British bars, pubs and restaurants have been forced to up their prices as a result of new Budgetary costs, new data has found.
Meanwhile, over half of hospitality businesses have been obliged to make unplanned redundancies in a bid to stay afloat.
These shocking figures were uncovered by the latest survey of the combined membership of the British Institute of Innkeeping, the British Beer & Pub Association and UKHospitality, with a joint statement from the three bodies saying that the numbers were illustrative of a tax regime which was now clearly “unsustainable.”
“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,” it read. “Unsustainable tax increases are squeezing businesses, stifling growth and investment, and threatening local employment, especially for young people.”
By means of redress, the trade chiefs reiterated calls for “a reduction in VAT for hospitality, changes to employer NICs and permanently lower business rates for the sector,” and underlined another survey finding which suggests that one in five hospitality business now have no cash reserves left.
“This situation forces businesses across the sector to make impossible decisions to cut jobs, put up prices, reduce opening hours,” said the bosses, “which sadly limits the support they desperately want to give their communities.”
Inflation continues to pile pressure on businesses
Inflation is continuing to put pressure on UK businesses as rising prices force many businesses to cut staff, shorten hours and increase prices, with “major stress” forecast for the coming months.
The Bank of England’s Monetary Policy Committee voted to hold interest rates at 4 percent last week as costs continue to mount, with hospitality operators already cutting outgoings and investment in order to survive.
“There has been little respite in inflation for hospitality businesses in 2025, and all figures point to yet more cost rises through to the crucial end-of-year trading period,” said Reuben Pullan, senior insight consultant at CGA by NIQ.
“Global and local supply and demand issues are putting major stress on prices, and businesses will have to work very hard to mitigate rises. They face the tough challenge of providing consumers with good value for money without compromising quality.”
Speaking to the Morning Advertiser, British Institute of Innkeeping CEO, Steve Alton, said: “Quite simply, our pubs cannot continue to shoulder the unfair burden of taxation placed on them, and immediate action must be taken in the Budget in November to mitigate these costs, before it is too late for these vital community assets.”
