Hospitality leaders brace for tough year as confidence drops to 37%
Independent operators are amongst the least confident.
Hospitality leaders have become significantly less confident about the year ahead as rising costs and weaker consumer spending weigh on the sector, according to the latest Business Confidence Survey from NIQ and Zonal.
The survey found that only 37% of hospitality leaders expect their businesses to perform well over the next 12 months, down from 51% in February when confidence was lifted by strong Christmas and New Year trading.
Confidence in the wider hospitality sector also declined during the second quarter, falling 10 percentage points to 21%.
Independent operators are amongst the least confident.
Only 16% of leaders running single-site businesses said they were optimistic about their prospects over the next year.
The decline in confidence comes amidst renewed inflation concerns linked to conflict in the Middle East and resulting fuel price increases, as well as falling consumer confidence in the UK.
The latest GfK Consumer Confidence Barometer showed consumer sentiment at its weakest level since 2023.
The survey also points to a slowdown in hospitality spending.
More than a third of leaders (36%) said their revenue fell compared with the same period last year—the highest proportion recorded since the start of 2024.
Rising costs have also affected profitability, with 34% reporting lower profits.
Operators expect cost pressures to continue.
More than four in five (82%) of leaders are concerned about rising food and drink prices over the next 12 months, whilst 75% are worried about higher employment costs.
Tax remains another major concern, with 73% citing VAT levels and 67% pointing to business rates as issues.
Hospitality leaders identified tax reductions, changes to national insurance contributions, more manageable increases to the minimum and living wage, and reforms to the business rates system as their main priorities for government action.
