April cost increases will force two-thirds of hospitality to cut more jobs

April 1, 2026

Increases to employment costs and business rates for many will once again cause job losses and hit business viability, the hospitality sector warns.

New member survey results from UKHospitality, the British Beer and Pub Association, the British Institute of Innkeeping and Hospitality Ulster reveal the damaging impact another year of significant cost increases will have on hospitality businesses.

The results

As a direct result of today’s cost increases, businesses will cut jobs (64%), cancel investment plans (51%) and reduce trading hours (42%). Around one in seven venues (15%) will be forced to close.

The increasing cost of energy was also a significant concern. Even when surveyed prior to the situation in Iran and the Middle East, almost all businesses (93%) said energy costs were impacting profitability.

Hospitality is united on its support for the measures that would allow their businesses to grow:

89%VAT reduction for hospitality

74%Permanent reform of business rates

65%Changes to employer National Insurance Contributions

The benefits of cutting hospitality's costs

The benefits of lowering hospitality’s tax burden are clear. Businesses would prioritise:

1
refurbishing and developing existing sites (70%)
2
creating new jobs (46%)
3
opening new sites (27%)

These are all measures that would drive economic growth and help people into work.

One voice

In a joint statement, the trade bodies said: “Yet again, hospitality businesses enter April facing billions of pounds in additional costs, which will force many to make heartbreaking decisions.

“Despite the necessary and welcome support for pubs on business rates, neighbourhood restaurants, local hotels and independent cafes all face their bills rising in the thousands.

“Hospitality’s tax burden – the highest in the economy – is suffocating the sector. The impact is clear: more lost jobs, less investment and business closures. The jobs, communities and livelihoods we support are hit once again.

“The worrying situation facing the business energy market has the potential to accelerate all of these impacts.

“Even before the conflict in Iran and the Middle East began, increasing energy prices were already impacting profitability and the Government should be prepared to support vulnerable businesses if they are thrown into yet another crisis.

“Hospitality businesses are clear that cutting their costs through a lower rate of VAT, business rates reform and changes to employer NICs will deliver new jobs, investment and growth.

“The benefits of backing our local pubs, restaurants, hotels, leisure and tourism businesses are obvious and if the Government works with our sector we can keep people in jobs, make our high streets flourish, and drive growth.”