Hospitality Crisis Deepens: Two Venues Close Daily as Cost Pressures Mount

The latest Hospitality Market Monitor from CGA by NIQ and AlixPartners shows the sector declined in the first half of 2025, with an average of two licensed venues closing each day.

The report cites rising costs from government tax policies to new employment expenses as key factors reversing the stability seen in 2024.

The downturn marks a shift for the industry after a relatively stable 2024, when venue numbers held steady. Experts point to rising cost pressures driven by changes to National Insurance Contributions, taxation, and tough operating conditions, as the key factors behind the recent decline.

The latest figures underscore the hospitality sector’s ongoing struggle to recover from the pandemic’s impact. Current venue numbers remain 14.2% below pre-COVID levels recorded in March 2020, with the industry having shed more than 16,000 licensed premises over the five-year period.

Despite the overall decline, Manchester city centre has bucked the national trend, emerging as the sole major UK city centre to record venue growth between March and June 2025.

Among the ten British city centres with the highest concentration of licensed premises, Manchester stands alone in expanding its hospitality offering.

Recent openings in Manchester have included a mix of London-based brands expanding northward, alongside local operators and independent entrepreneurs taking advantage of opportunities in the market. The growth pattern highlights regional differences in both consumer demand and the operational sustainability of hospitality businesses across the UK.

Graeme Smith, a Partner & MD at AlixPartners, said: “After a period of relative stability for pub and restaurant businesses last year, the first half of 2025 has proved more challenging, with the net closure rate increasing again – the big question for hospitality is what happens from here.

Kate Nicholls, Chair of UKHospitality, commented: “These latest figures are a devastating blow, showing in the starkest terms the impact of Government-driven cost pressures. Two hospitality venues closing every day is not just a statistic; it represents the hollowing out of our high streets and communities. Independent businesses, the lifeblood of our sector, are being disproportionately crushed under the weight of unfair taxation and soaring employment costs.”

Source: Conference News