Britain’s hospitality sector is facing a wave of closures unless the Government expands business rates relief beyond pubs to include restaurants, hotels and bed and breakfasts, according to industry body UK Hospitality.
The organisation has warned that more than 2,000 venues could close permanently this year without further support.
That would equate to around six hospitality businesses shutting their doors each day, a pace UK Hospitality warned would put thousands of jobs at risk across towns and cities.
The warning comes ahead of property tax increases due to take effect on April 1, with the trade body saying the sector is bracing for sharp rises in business rates.
Kate Nicholls, chair of UK Hospitality, said time was running out for ministers to act, warning that businesses were facing what she described as “staggering” increases in costs.
The organisation estimates that 574 hotels, 540 pubs and 293 restaurants could close permanently in 2026, with hotels carrying the heaviest burden.
It calculated that the average hotel will see its business rates rise by £28,900 this year and face cumulative increases of £205,200 over three years — a 115 per cent jump in property tax liabilities.
Britain’s hospitality sector is facing a wave of closures
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Pubs are expected to see smaller increases by comparison, with an average rise of around £1,400 in 2026, equivalent to roughly 15 per cent.
Over three years, pub business rates are forecast to increase by 76 per cent, adding around £12,900 to their overall bills.
Industry leaders said the disparity underlines why support limited only to pubs would leave much of the sector exposed.
UK Hospitality said the rate increases reflect property revaluations and the withdrawal of Covid‑era relief, changes confirmed in the Chancellor’s November Budget.
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PAMs Nicholls said the impact would be felt far beyond public houses, stressing that neighbourhood restaurants, independent hotels and inns sit at the heart of their communities, providing local jobs and supporting farmers and food producers.
She argued that “a whole‑hospitality solution” is needed and warned that thousands of venues could close permanently if no action is taken.
The organisation said hospitality already carries the highest tax burden of any industry and has been heavily affected by rising National Insurance contributions, higher wages and increased energy costs.
Opposition figures have also criticised the Government over the impact of tax rises, with Conservative leader Kemi Badenoch accusing ministers of “clobbering” the sector and claiming Labour’s policies were harming pubs, restaurants and hotels.
Keir Starmer has refused to say whether he’ll extend the relief to other businesses
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POOLSir Keir Starmer declined to say whether the Government would reverse the planned increases.
Responding to Mrs Badenoch in the Commons, the Prime Minister said 7,000 pubs had closed during the Conservatives’ time in Government and noted that she had not raised concerns when serving as Business Secretary.
UK Hospitality is calling for the business rates discount to be increased from 5p to 20p — the maximum permitted under existing legislation.
The Government has already established a £4.3billion fund to support pubs facing higher rates, and further measures for the wider hospitality sector are expected to be considered.
English hospitality businesses will see the new rates take effect from April 1.