UKHospitality warns of 2,076 closures in 2026

More than 2,000 hospitality venues could close this year without sector-wide business rates support, UKHospitality has warned.

 

New modelling from the trade body has revealed that six hospitality venues could close every day in 2026.

 

It forecasted the industry could see 963 restaurant, 574 hotel and 540 pub closures in the year ahead without additional support from government – the equivalent of 19 restaurants, 11 hotels and 10 pubs closing every week.

 

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

 

UKHospitality has called on the government to increase the business rates discount for hospitality properties from 5p to 20p, the maximum permitted in law, to ensure the government delivers its manifesto commitment of levelling the playing field between the high street and online giants. 

 

The warnings come as the Treasury hinted at plans to introduce a pubs-specific support package to alleviate concerns around business rates last week.

 

A fuller announcement is expected in the coming days after pressure on the government from its own MPs and the hospitality industry, who have pointed out the existential threat to businesses across the country. 

 

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, which bears the highest tax burden in the economy and has already been disproportionately burdened by increases to National Insurance Contributions, 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 business. 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.”