Hospitality Is Fighting on Every Front. Has the Budget Done Enough?

Running hospitality businesses in the UK right now feels like a fight on every front. And after more than 30 years in this industry, I can't remember any period when the pressure has felt quite like this.

Over the past 27 months, we've seen a relentless stream of tax changes, rising employment costs and measures/red tape and of course increasing pressure on both business and household disposable income.

And this week, we've had another Budget.

Anyone hoping for an early Christmas present for hospitality will have been disappointed. Despite the announcements, I struggle to see how this Budget is going to make life any easier for those of us running hospitality businesses, in fact again we face a very uncertain 2027.

Everything is going up. Food, fuel, utilities, wages, rents and the cost of a night out. Yet we're expected to celebrate small measures that barely scratch the surface.

While I absolutely welcome increases in the minimum wage for workers, we cannot ignore the consequences for the businesses employing them or the continuing youngsters costed out of being employed.

The Cost of Doing Business

Employer National Insurance has already increased from 13.8% to 15%, while the threshold at which employers begin paying it has dropped from £9,100 to just £5,000.

Now we have further increases in the minimum wage to contend with.

To put that into perspective, at SAVVY Collective, the latest minimum wage changes alone will add approximately £1,200 a month to our smallest hotel, which employs just 11 people.

That's £14,400 a year in additional costs, before we even begin looking at National Insurance, pensions, utilities, supplier costs, business rates and compliance.

Every time we look at taking on another team member or investing in one of our venues, the numbers become harder to justify.

Meanwhile, whilst hotel room rates have increased by a few pounds, occupancy/demand has fallen, and revenues remain relatively flat while costs continue to climb.

Something simply doesn't add up.

And ultimately, these pressures lead to higher prices, fewer staff, reduced opening hours and potentially a poorer customer experience.

Our Customers Are Feeling It Too

It's not just businesses being squeezed.

Frozen Income Tax thresholds, rising household bills and the general cost of living are putting pressure on people's disposable income.

A family might decide against a weekend away. A couple might go out for dinner once a month instead of twice. Someone might skip that extra drink or stay at home altogether.

And I don't blame them.

But when customers spend less, hospitality businesses earn less. And when businesses earn less, they invest less, recruit less and contribute less to the economy.

Now we also face the prospect of additional tourism taxes, potentially making a night away even more expensive.

We should be encouraging people to visit our towns and cities, not making it harder for them to do so.

What About the Next Generation?

Another concern is what all of this means for young people entering hospitality.

Our industry has always been a fantastic place to start a career, teaching communication, confidence, responsibility and skills that last a lifetime.

Yet apprenticeships and entry-level employment are now simply too expensive for businesses, their rate of pay, support and general requirements are simply too prohibitive as the rest of the business has no give.

We spend so much time talking about skills shortages and encouraging young people into hospitality, but we're making it harder for businesses to give them that first opportunity.

Surely that cannot be the answer?

We Don't Want Handouts. We Want Fair Taxation.

I've always believed that a strong private sector is essential to a successful country.

Businesses create jobs, train people, invest in communities and generate the tax revenue that pays for our public services.

But there has to be a balance.

We cannot continue expecting the private sector to absorb increasing costs while delivering the economic growth the country desperately needs.

And I think it's time we had a serious conversation about government spending too.

Public sector employment remains at historically high levels, yet many would question whether the quality and productivity of public services reflect the amount being spent.

Government debt runs into the trillions, and we're still dealing with the financial consequences of the pandemic.

I appreciate that running a country isn't easy, but difficult decisions cannot always come down to taking more money from businesses and working households.

We need a proper review of public sector productivity, difficult conversations about the sustainability of the benefits bill and an environment where private businesses are encouraged to flourish.

Because a growing private sector means more jobs, more investment and ultimately more money going into the Treasury.

What Happens Next?

My biggest concern remains the first quarter of 2027.

Without meaningful support, I genuinely worry we could see a wave of hospitality closures, fewer jobs and declining services.

And when a hotel, pub or restaurant closes, it's not just another business disappearing from the high street. It's jobs lost, careers interrupted, suppliers losing customers and communities losing places where people come together.

Hospitality contributes far more to this country than tax revenue, and I sometimes wonder whether those making the decisions in Westminster truly understand that.

I don't expect miracles from any government, and I'm certainly not suggesting hospitality should be exempt from paying its fair share.

But you cannot keep increasing costs and expect businesses to absorb everything without consequences.

Wednesday's Budget was another opportunity to recognise the pressures facing our industry. Unfortunately, I don't believe it delivered the meaningful support so many operators were hoping for.

We don't want handouts. We want fair taxation, sensible policies and a government that genuinely understands the value of the private sector.

Hospitality is an incredible industry, full of hardworking, passionate and resilient people.

But resilience can only take us so far.