UK Hospitality Crisis: 7 in 10 Venues Struggling to Fill Seats

The UK hospitality industry is grappling with a worsening financial squeeze, as new research reveals that most businesses are operating at well below sustainable levels.

A nationwide survey of 14,300 venues, conducted by CGA by NIQ in August, has uncovered that 69% of operators are trading at or below 85% of required capacity. The findings—representing members of the British Institute of Innkeeping (BII), the British Beer & Pub Association (BBPA), UKHospitality, and Hospitality Ulster—highlight an industry under immense strain, following the government’s April tax increases.

The report paints a stark picture. Since the Budget, 84,000 hospitality jobs have been lost, with the sector now facing an additional annual cost burden of £3.4 billion. Nearly three-quarters of operators (73%) report having less than six months of cash reserves, while one in five admit to having none at all.

The consequences are evident: more than half of venues have cut staff, while close to four-fifths (79%) have been forced to raise prices simply to remain afloat. These measures, though necessary for survival, risk dampening customer demand and eroding the long-term competitiveness of a sector vital to the UK economy.

The joint statement from the four major trade bodies underscores the seriousness of the situation:

“This shocking data reinforces the urgent need for the 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.”

They warn that “unsustainable tax increases are squeezing businesses, stifling growth and investment, and threatening local employment, especially for young people.”

To reverse the decline, industry leaders are united in calling for three key measures:

1. A reduction in VAT for hospitality
2. Changes to employer National Insurance Contributions (NICs)
3. Permanently lower business rates for the sector

The message is clear—without immediate government action, thousands more jobs and community-based businesses risk being lost.

The alarm has not gone unnoticed in Parliament. A Conservative MP recently warned that the sector is being “taxed out of existence”, echoing industry fears that government policy risks dismantling one of Britain’s most important economic and social pillars.

The hospitality sector is more than pubs, restaurants, and hotels—it is a cornerstone of British culture, community, and employment. With hundreds of thousands of jobs at stake, particularly for younger workers, the forthcoming Budget will prove decisive.

Will the government step in to support a sector that fuels local economies and strengthens social bonds—or will continued fiscal pressure push businesses closer to collapse?

The answer may well determine the long-term future of hospitality in the UK.