A fifth of º£½ÇÊÓƵ hospitality businesses have depleted their cash reserves, and nearly eight in 10 have increased prices to cope with the series of cost increases imposed on them in last year's autumn Budget.
New data from four trade bodies within the sector revealed that 69 per cent of members have less than six months of reserves remaining, while one in five have no safety net, highlighting the multitude of challenges the beleaguered industry is confronting, as reported by .
The hospitality industry's dependence on a large workforce of low-skilled workers has made it particularly vulnerable to the government's decision to approve an above-inflation rise in the minimum wage and its £24bn increase in employer national insurance contributions at its inaugural Budget last October.
The change in national insurance alone is estimated to have added an extra £3bn annually to the sector's costs – or 10 per cent per worker – and resulted in 84,000 fewer jobs being created.
These industry-wide difficulties have prompted 79 per cent of managers to hike their prices since autumn, according to the data, while over half have cut jobs as they scramble to stabilise their flagging finances.
Sector facing 'impossible decisions'
The alarming results, drawn from a survey of º£½ÇÊÓƵ Hospitality, the British Institute of Innkeeping (BII), the British Beer & Pub Association (BBPA) and Hospitality Ulster members, prompted all four trade bodies to release a joint statement cautioning that operators across their sector were being forced to make "impossible decisions".
"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," the lobby groups wrote.
"Unsustainable tax increases are squeezing businesses, stifling growth and investment, and threatening local employment, especially for young people."
Trade leaders released the findings alongside appeals for the government to cut VAT for their members at this autumn's fiscal statement, as they struggle to maintain affordable prices for patrons and customers.
Executives also urged ministers to "amend the changes to employer NICs" and provide reduced business rates for the industry.
"Businesses across the sector [are making] impossible decisions to cut jobs, put up prices, reduce opening hours and sadly limit the support they desperately want to give their communities," the statement continued. "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."
Earlier this week, an examination of government statistics disclosed that a minimum of 209 pubs closed down during the first half of 2025, equating to eight per week.
