Rising costs increasingly force hospitality businesses to cut jobs, research reveals

Rising operating costs are driving significant changes across the hospitality sector, with many businesses cutting jobs, reducing hours and cancelling investment, according to industry data.

Analysis by money.co.uk, based on findings from UKHospitality and industry bodies, revealed that cost pressures are increasingly shaping day-to-day business decisions.

The survey found that 64% of hospitality businesses plan to cut jobs, while 51% expect to cancel investment.

A further 42% said they are likely to reduce trading hours, and 15% reported they may need to close entirely.

Joe Phelan, business bank accounts expert at money.co.uk, said: “New data from UKHospitality and a coalition of industry bodies shows how rising costs are already feeding into business decisions across the hospitality sector, with many planning to scale back investment, reduce hours or cut jobs.

“With increases to employment costs and business rates now in effect, the findings highlight the pressure even relatively small cost changes can place on a sector that typically operates on tight margins.

“And, while the data focuses on hospitality, it reflects a broader set of pressures that many small businesses continue to navigate.”

The findings suggested businesses are shifting focus from growth to stability, with hiring and expansion among the first areas to be scaled back.