Across the UK, Mother's Day represented a vital revenue opportunity for the hospitality sector. Bars, restaurants, cafés and pubs would have anticipated a boost courtesy of family groups - and some spring-like weather. Sadly though, due to some harsh financial realities including higher tax and wage bills coming into force now, many of these establishments may not survive to serve customers next Mother's Day.
Author
- Zoe Adjey
Senior Lecturer in Hospitality and Events, University of East London
The budget has introduced measures that are projected to directly increase the average hospitality wage bill by up to 8.5% thanks to increases in the minimum wage and employer national insurance contributions.
The UK's most recent GDP figures showed the country's economy shrank by 0.1% in January. But behind this small decline there was a more concerning trend. Trade in the hospitality industry fell by 2.4% - the biggest economic contraction among the figures - after it had shown promising growth of 0.9% in December.
It's likely that customers saw so-called "awful April" on the horizon - bringing rises in a range of utility and consumer costs - and were beginning to curb their spending. But costs are rising for venues too. Many of those bars, cafés, restaurants and hotels that remain open will have to increase prices and cut opening hours to make the numbers add up.
Behind each closed pub or empty restaurant lies a story that goes far beyond its four walls. I've worked in the sector since my teenage years - from family-run establishments on the Northern Irish coast to venues in London and overseas - and I've seen firsthand how business closures affect people. Now, as a lecturer in hospitality, I can see what support this unique sector needs to weather the storm.
I have seen small seaside cafes where owners knew every customer by name, providing essential social connections for elderly visitors who may not have had another social interaction that day. When these cafes closed, the community bonds were severed overnight.
Every shuttered hotel or bar means people losing their livelihoods, perhaps mothers working part-time to balance employment and childcare or students funding their education. The impact of these closures is immediate and profound, and extends throughout the supply chain.
They affect the dairy farmer who supplied the milk, the baker who made fresh pastries each morning, and the technician who serviced the coffee machines. This interconnected web generated £121 billion in economic activity in 2022 across the UK.
Weddings and wakes
Pubs and cafes are more than just businesses. Often, they're the beating hearts of communities. These are the spaces where neighbours stop to chat, where chance encounters bloom into lifelong friendships and romances, and where people come together for weddings and wakes. When the shutters come down, it represents a tear in the community fabric and threatens the cohesion of neighbourhoods.
As the gathering places where communities come together, pubs and cafes simultaneously create livelihoods that support those same communities. Hospitality in the UK employs an extraordinary 3.5 million people directly (and another three million indirectly through supply chains and support industries). This makes it the UK's third largest employer, behind only retail and healthcare.
This dual role, as both social hub and major employer, makes these establishments uniquely valuable.
The stark GDP figures for hospitality at the start of 2025 expose a concerning shift in consumer habits, with fewer people choosing to book a table in a restaurant, instead making do with buying in groceries for a meal at home. This harks back to the times of COVID lockdowns. Even people who still visit hospitality venues are spending less per visit , compounding the revenue challenges.
When a family chooses to eat at home rather than visit their local restaurant, the impact extends far beyond that empty table. Farmers, delivery drivers, kitchen manufacturers and cleaning services (to name just some) all feel the pinch.
For the small businesses in the hospitality supply chain - many of which derive more than 80% of their income from the sector - this spending shift is an existential threat. Historically, such changes in consumer behaviour have been early indicators of broader economic downturns , making this pattern particularly worrying.
A VAT reduction offers a compelling solution for UK hospitality business. European countries like Italy and France charge 10% on "food for immediate consumption", while in Greece it's 13%. These are far below the UK's 20%. A change along these lines could protect customers against price rises, improve business cash flow, and offset the wage and NI contribution increases.
And there is precedent for this. During the 2008 recession, Chancellor Alistair Darling cut VAT from 17.5% to 15% for 13 months as part of a stimulus. The following year's budget reported "positive early signs" of lower prices supporting consumer spending.
But right now, this combination of rising costs and reduced consumer spending creates a perfect storm for an industry that has traditionally underpinned economic recoveries. With millions of people relying on hospitality for their livelihoods, this trajectory of decline must be corrected - or there will be profound implications for the wider pattern of economic growth across the UK.
Zoe Adjey does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
