Nearly half of hospitality operators forced to cut back on capex, survey shows

Nearly half (45%) of hospitality operators have been forced to cut their capital expenditure programmes as a result of rising operational costs, according to a recent survey.

The results are based off the latest Business Confidence Survey from CGA by NIQ and Sona, which was conducted among leaders at CEO, managing director, chair and board levels across more than 14,000 hospitality businesses between July and early August 2025.

The survey showed nearly two thirds (63%) of operators had to increase their operational expenditure over the last 12 months due to inflationary pressures on labour, food and drink, compared to a third (34%) who had capacity to increase capital expenditure.

April’s triple whammy of tax rises have led to greater polarisation in the sector, with a quarter of hospitality leaders having managed to increase both operational and capital expenditure, while 14% have had to reduce both.

The independent sector has been particularly badly hit, with just 22% of independent hospitality businesses increasing their capital expenditure year-on-year in comparison to the 60% who have had to cut spending on site enhancements and refurbishments.

Karl Chessell, director – hospitality operators and food, EMEA at CGA by NIQ, said: “April’s increases in pay levels and National Insurance Contributions have added yet more weight to the heavy cost burdens on hospitality businesses. They have further polarised the sector, between successful and efficient businesses that are able to invest across the board, and weaker ones that are struggling to keep up with day-to-day costs and are scaling back capital projects.

“All leaders are acutely aware of the importance of capex, especially in areas like technology, which can unlock efficiencies and extra revenue. Investment here feels a big stretch for some operators at the moment – especially smaller ones – but it’s going to be essential if businesses are to stay competitive and meet guests’ evolving needs.”

Paul Watson, VP of hospitality at Sona, added: “For smaller and independent businesses especially, targeted tech investment isn’t just a cost, it’s a strategic lever to unlock resilience, agility and long-term competitiveness in a volatile market.”