A third of UK hospitality businesses ‘operating at a loss’ after April tax hikes

The UK hospitality sector is facing a defining moment.

A recent industry survey conducted by UKHospitality, the British Beer & Pub Association, the British Institute of Innkeeping, and Hospitality Ulster reveals that nearly one-third of the UK’s pubs, bars, restaurants, and hotels are now operating at a loss. This sobering figure comes in the wake of a wave of government-imposed fiscal changes introduced in April, sparking fresh concerns about the long-term viability of one of Britain’s most culturally and economically significant industries.

At AGS Group, we work closely with hospitality businesses across the UK—and we understand just how critical this moment is. In this blog, we explore the challenges facing the sector, the potential consequences of inaction, and how our facilities management (FM) services can help operators regain control, reduce stress, and focus on what they do best: creating exceptional guest experiences.

The Mounting Financial Strain on Hospitality Businesses

The UK hospitality industry contributes over £26 billion to the national economy and supports nearly one million jobs. But despite its importance, it is under severe pressure from multiple angles:

• Employer National Insurance contributions (NICs) rose from 13.8% to 15% 

• The NIC earnings threshold was lowered from £9,100 to £5,000 

• Business rates increased for many premises

According to the survey, the result of these changes is staggering:

• 60% of hospitality businesses have already cut jobs 

• Nearly two-thirds have reduced staff hours 

• Over half have cancelled planned investments

• 76% have increased customer prices in an attempt to stay afloat

The total cost burden on the sector is estimated at £3.4 billion. Industry leaders warn that this is the sharpest quarterly rise in operating costs in years, and it risks accelerating the closure of local pubs, independent restaurants, boutique hotels, and family-run venues still reeling from the pandemic and persistent inflation.

"You Can’t Pour from an Empty Glass" — Why Operators Need Operational Support Now More Than Ever

With the busiest season of the year fast approaching, hospitality businesses need to be focused on driving footfall, delivering service, and staying competitive. But many owners and managers are bogged down with operational headaches—from maintenance and compliance to cleaning, waste management, security, and emergency repairs.

That’s where AGS Group comes in...

How AGS Group Supports Hospitality Businesses

At AGS Group, we specialise in end-to-end facilities management tailored for the needs of the hospitality industry. We understand that operational efficiency and reliability are not just “nice to have”—they are vital to survival in a market as pressured as this one.

🔧 Planned & Reactive Maintenance

Our teams ensure your property is compliant, well-maintained, and running smoothly, without unexpected downtime or costly disruptions.

🧹 Professional Cleaning Services

First impressions count. Whether it’s a pub, hotel, or restaurant, our professional cleaning ensures a spotless and hygienic environment that enhances customer experience.

🔐 Security & Monitoring

With economic uncertainty comes increased risk. Our security solutions help protect your property, staff, and guests, giving you peace of mind.

♻️ Waste Management & Environmental Services

We support sustainability and cost control through efficient waste collection and recycling strategies that are tailored to your operation.

🌟 Compliance & Safety Checks

Our FM teams keep your business safe and compliant with current health, safety, and fire regulations—so you avoid fines, penalties, or worse.

Why Facilities Management Matters Right Now

In tough times, cutting corners on maintenance or cleaning might seem like an easy way to save. But the reality is that neglected buildings, unexpected breakdowns, and hygiene issues can cost more in the long run—both financially and reputationally.

By outsourcing your FM needs to a reliable partner, you gain back time, reduce stress, and allow your team to focus on customers, not crises.

The Road Ahead: Be Ready for the Summer Surge

The hospitality industry is a cornerstone of British society—bringing people together, driving local economies, and enriching communities. But it needs real support to survive and thrive.

While trade bodies continue to push for tax reform and financial relief, hospitality leaders must also look internally at how to improve resilience and efficiency in their operations. AGS Group stands ready to support you in that mission.

As summer approaches and customer demand increases, now is the time to offload the operational burden and get your business back to doing what it does best.

Bottom Line:

At AGS Group, we believe in partnerships, not transactions. Whether you run a boutique hotel, a busy restaurant, or a high-street pub, we’re here to lighten the load.

You’ve already got enough on your plate, let us handle the rest. 

Speak to our team on 0330 094 9330 today or visit www.agsgroup.co.uk