Six hospitality venues could close every day in 2026 without a sector-wide solution to tackle business rates increases.
That’s the warning of UKHospitality which said 963 restaurants, 574 hotels and 540 pubs are set to shut their doors for the last time this year.
Following reforms announced in last November’s Budget, the group said the average hotel will see business rates increase by £28,900 next year and by £205,200 in total over the next three years – a hike of 115%. Business rates for the average pub will increase 15% in 2027 – an extra £1,400 – and by 76% over the next three years – up £12,900.
It has been reported that the government will soon announce new support to help pubs in England deal with the business rates rises following protests by the sector following the impact of the ending of Covid-era business rates relief and a revaluation of properties.
But UKHospitality said help should cover all hospitality companies. It is calling for the government to increase the business rates discount from 5p to 20p, the maximum permitted in law.
Kate Nicholls, chair of UKHospitality, said:
“Staggering increases to business rates will affect the entire hospitality sector and without a hospitality-wide solution, we will see significant business closures.
“This is yet another blow to a hospitality sector that bears the highest tax burden in the economy, and has already been disproportionately burdened by increases to NICs, wages, energy and other inputs.
“Hospitality is one of the nation’s biggest employers and has an incredible potential to grow and create jobs, but the money coming in the front door is simply not enough to offset the rocketing costs of doing businesses. All of this undermines the government’s objectives to grow the economy and help more people back into work.
“We need a hospitality-wide solution that averts damaging business rates hikes in April. The government needs to implement the maximum possible 20p discount to the multiplier for all hospitality properties.”