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UK hospitality crisis deepens as hotels and restaurants demand equal support

Hoteliers and restaurateurs warn of price hikes and job cuts as the government's £300M relief package leaves them behind. Will the industry survive?

,   and  Administrator
2 min read
The image shows a hotel room with a large bed covered in a blanket and pillows, a chair, a table, a...
The image shows a hotel room with a large bed covered in a blanket and pillows, a chair, a table, a telephone, a lamp, a photo frame on the wall, a window with curtains, and a roof with ceiling lights.

UK hospitality crisis deepens as hotels and restaurants demand equal support

The UK hospitality sector is facing growing financial strain as inflation and rising costs hit hotels and restaurants harder than other industries. While the government recently announced support for pubs, hotel owners and industry leaders have criticised the move for leaving other businesses behind.

Hotel tycoon Surinder Arora has spoken out against what he calls an unfair focus on pubs, arguing that the entire sector needs urgent help to cope with soaring expenses.

Since early 2024, inflation in the hospitality industry has remained stubbornly high. By mid-2024, it reached 5.9%, far above the general Consumer Price Index (CPI) of 2-3%. Even as headline inflation eased, hotel and restaurant prices rose from 3.8% to 4.1% in the year to January.

Rising labour costs, food prices, and energy bills have squeezed businesses across the sector. Wages have climbed, but job growth has slowed, leaving over 130,000 vacancies unfilled by early 2026. Many hotels and restaurants have cut back on hiring, particularly for low-skilled roles, and some have even reduced staff numbers to manage costs.

In January, Chancellor Rachel Reeves unveiled a £300 million emergency relief package—targeted only at pubs and live music venues. The decision sparked anger among hoteliers and restaurant owners, who argued they were equally struggling. Surinder Arora, a prominent hotel tycoon, accused the government of ignoring the 'unprecedented' business rate hikes and other financial pressures facing hotels.

UK Hospitality chief executive Allen Simpson warned that without broader support, businesses may have no choice but to raise prices for customers. He highlighted that pubs, bars, and restaurants were all feeling the pinch, with no sign of relief beyond the limited aid package.

The government's targeted support for pubs has left hotels and restaurants without assistance, despite their shared struggles with inflation and rising costs. Industry leaders continue to push for wider measures, as businesses face tough decisions over staffing, pricing, and long-term survival.

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