Soaring costs holding back investment, new member survey reveals

October 23, 2026

Strong summer trading hasn’t improved hospitality profitability, as 80% of businesses say investment still stifled by soaring costs.

New member survey data reveals that rising energy, food and drink costs are eroding margins, alongside the heavy tax burden facing the sector, despite a trading boost from the weather and major televised sport.

New member survey results from UKHospitality, the British Beer and Pub Association, the British Institute of Innkeeping and Hospitality Ulster found that any gains in revenue over the summer are being swallowed by significantly higher energy bills and persistent food and drink inflation, on top of the continued pressure from high taxation.

Our survey says

In the last three months, the sector has seen significant increases in its energy costs. Almost three-quarters (74%) of respondents saw increases in their electricity bills, with 65% and 61% seeing increases in gas and heating oil costs, respectively.

Of the non-tax challenges facing businesses over the next 12 months, food and drink cost inflation was the biggest concern for businesses (88%), with energy prices a close second (80%).

As a result, 80% of respondents said the current business environment is stifling new investment in the sector, hampering growth and limiting employment opportunities.

74%of businesses have seen their electricity bills increase

88%said food and drink cost inflation was their biggest non-tax concern

80%said the current business environment is stifling investment

Opportunity

The survey also points to a significant opportunity for job creation in hospitality. Nearly half (48%) of hospitality businesses said they would invest in employing more young people if the sector’s high tax burden was reduced, and 57% said a lower rate of employer National Insurance contributions would help protect against further job losses.

Joint statement

In a joint statement, the trade bodies said: “A great summer of sunshine and sport brought customers through the door to connect with friends and family, but strong sales are not the same as healthy profits.

“In addition to paying the highest tax burden in the economy, energy costs have risen sharply, with more to come, and food and drink inflation remains stubbornly high, so many businesses are working harder than ever for less. It is no surprise that four in five say the current business environment is holding back investment.

“This is about more than balance sheets. Hospitality is the biggest employer of young people in the country, and our survey shows nearly half of businesses would take on more of them if the tax burden were eased, with almost 60% saying it would protect against further job losses.

“We urge the Government to recognise that opportunity and act at the Budget to reduce our tax burden and remove barriers to support investment, growth and jobs in every postcode.”