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More than 2,000 hospitality venues could close over the coming year unless the government introduces sector-wide relief on business rates, according to new analysis from UKHospitality.
The trade body said modelling suggests 2,076 closures in 2026, equivalent to around six venues a day, driven by sharp increases in business rates due to take effect in April. The forecast includes 963 restaurants, 574 hotels and 540 pubs.
UKH said the rises would place additional pressure on businesses already facing higher wage costs, national insurance contributions, energy bills and other operating expenses.
The analysis shows the average hotel is expected to see its business rates bill rise by £28,900 next year, with a cumulative increase of £205,200 over three years – a rise of 115%.
Meanwhile, the average pub is forecast to face a 15% increase next year, adding £1,400, rising to a 76% increase over three years, equivalent to £12,900.
In light of this, UKH is calling on the government to increase the business rates discount for hospitality properties from 5p to 20p, the maximum allowed under existing legislation.
The organisation said the change was necessary to deliver the government’s stated aim of levelling the playing field between high street businesses and online retailers.
Kate Nicholls, chair of UKHospitality, said: “Staggering increases to business rates will affect the entire hospitality sector and without a hospitality-wide solution, we will see significant business closures.
“Thousands of venues, particularly neighbourhood restaurants and local hotels, will be forced to close for good as a result of the significant rate rises they’re facing.”
She added: “Hospitality is one of the nation’s biggest employers and has an incredible potential to grow and create jobs, but the money coming in the front door is simply not enough to offset the rocketing costs of doing business. We need a hospitality-wide solution that averts damaging business rates hikes in April.”
