Knife-Edge Hospitality Calls on Government to serve Up Change
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Wednesday 19 November 2025 9:34 am
The hospitality sector is on a “knife-edge” and urgently needs government intervention to avoid widespread closures, industry leaders have warned. A cocktail of rising costs, staff shortages, and weakening consumer confidence is pushing businesses to the brink, with many facing an uncertain future this winter.
A new report from UKHospitality, the trade body representing the sector, reveals that operating costs have soared by an average of 22 per cent in the past year. Energy bills, food prices, and labor costs are all contributing to the squeeze, while businesses are also grappling with the impact of increased National Insurance contributions and the upcoming hike in the minimum wage.
“The situation is incredibly challenging,” said Kate Nicholls, CEO of UKHospitality. “Businesses are doing everything they can to absorb these costs, but they are reaching a breaking point. We are seeing a significant number of venues reducing their opening hours, cutting back on investment, and, in some cases, closing their doors altogether.”
The report also highlights the ongoing issue of staff shortages, which is exacerbating the challenges faced by the sector.Brexit, the pandemic, and a perceived lack of career progression opportunities are all contributing to the problem.
“We need to make hospitality a more attractive career choice,” Nicholls added. “That means addressing issues such as pay, working conditions, and training opportunities.”
Industry leaders are calling on the government to take a range of measures to support the sector, including:
* Reducing the VAT rate: A temporary reduction in VAT for hospitality businesses would help to offset some of the rising costs and boost consumer spending.
* Extending business rates relief: Continuing the current business rates relief scheme would provide much-needed financial support to businesses.
* Addressing labour shortages: Implementing a more flexible immigration system and investing in training and apprenticeships would help to fill the skills gap.
* Providing energy support: Extending the Energy Bill Relief Scheme or introducing a similar measure would help businesses to manage their energy costs.
“The government needs to recognize the vital role that hospitality plays in the UK economy and take urgent action to support the sector,” Nicholls warned. “If we don’t, we risk losing a significant number of businesses and jobs.”
The hospitality sector is a major employer, providing jobs for over 3.2 million peopel across the UK. It also contributes billions of pounds to the economy each year. However, its future is now hanging in the balance, and the government’s response will be crucial in determining whether it can survive this latest crisis.
Knife-Edge hospitality Calls on Government to Serve Up Change
The hospitality sector is on a “knife-edge” and urgently needs government intervention to avoid widespread closures and job losses, industry leaders have warned.
A coalition of trade bodies, including UKHospitality, the British Beer and Pub Association, and the British Institute of innkeeping, have penned a letter to the Chancellor calling for a comprehensive package of support.
The sector is grappling with a perfect storm of challenges: soaring energy bills, rising food costs, labour shortages, and a squeeze on consumer spending. Many businesses are facing bills that are several times higher than last year, making it unachievable to remain profitable.
“Hospitality is a vital part of the UK economy, contributing billions in tax and employing millions of people,” said Kate Nicholls, CEO of UKHospitality. “But it is currently facing an existential crisis. Without urgent government action, we risk losing a significant number of businesses and jobs.”
The letter calls for a range of measures, including:
* A cap on energy bills for businesses: Similar to the scheme for households, this would provide much-needed relief from crippling energy costs.
* A reduction in VAT: Cutting VAT from 20% to 12.5% would help to stimulate demand and make hospitality businesses more competitive.
* Business rates reform: The current system is unfair and disproportionately impacts hospitality businesses.
* Additional support for staff recruitment and retention: Addressing the ongoing labour shortages is crucial for the sector’s recovery.
Industry leaders argue that the government has a obligation to support hospitality, given its importance to the economy and its role in providing social and cultural experiences.
“We are not asking for a bailout,” Nicholls stressed. “We are asking for a level playing field and a supportive environment that allows us to thrive.”
The coming months will be critical for the hospitality sector. Without decisive action from the government, many businesses fear they will be unable to survive the winter.
## Hospitality on the Brink: Industry Calls for Budget Support
Industry insiders – from chefs to independent brands – are calling on the Chancellor to provide real support in next week’s Budget, writes Carys Sharkey
“I’d rate it one out of 10. Frankly, it’s been negligible”.
Ask any chef across the country how they would rate this government’s support for the hospitality sector and you’ll be hard-pressed to find someone with something positive to say.
Atul Kochhar, a holder of two Michelin stars and a pioneer of Indian fine dining in the UK, does not mince his words, and speaks for many chefs with his dire rating of Labour’s tenure. He goes on to add:
“The hospitality sector has faced and continues to face enormous challenges, we’ve been hit hard with 360 degree rising costs and regulatory pressures.”