Thousands of hospitality businesses could close without sector-wide business rates solution

New analysis from UK Hospitality has revealed that six hospitality venues could close every day in 2026, if the Government doesn’t introduce a hospitality-wide solution to avert significant business rates increases in April.

The analysis shows the scale of potential closures and forecasts that 963 restaurants, 574 hotels and 540 pubs would be set to close this year, 

Currently, the average hotel will see its business rates increase by £28,900 next year and by £205,200 in total over the next three years – an increase of 115%. The average pub will see its rates increase 15% next year – an extra £1,400 – and by 76% over the next three years – an increase of £12,900.

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. Thousands of venues, particularly neighbourhood restaurants and local hotels, will be forced to close for good as a result of the significant rates rises they’re facing.

“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.”