Hospitality confidence crashes ahead of Autumn Budget

Optimism is fast turning to despair among hospitality business owners ahead of today’s Autumn Budget announcement, a new poll has revealed.

The survey of more than 13,100 hospitality sites took place at the start of the third quarter and revealed that only a quarter of owners are optimistic about prospects for their business over the next 12 months.

In a shocking indictment of the slide in mood, this is a 15 percentage point drop from the previous quarter, and continues a trend Startups first reported on at the start of this year.

Indeed, more than 340 businesses, including Wagamama, Marston’s, which operates more than 1,300 pubs, plus its rival Stonegate, the owner of Slug & Lettuce, directly appealed to the Government with an open letter.

The letter, which came from action group UKHospitality,said the UK Government needed to “…deliver change for hospitality at this Budget so that we can get back to growth”.

Confidence is low

The survey delved into the state of affairs for hospitality businesses around the country. Carried out by insight company CGA and reported by Fry magazine, it revealed that a third of hospitality operators (36%) have reduced their trading hours in the third quarter of 2025.

Others have taken action to try and buoy their business with 85% raising menu prices. However, the survey also revealed that many have had to dig deep just to survive. Only a quarter hold 12 months-worth of cash reserves.

The CGA RSM Hospitality Business Tracker, which was based on a different set of respondents, suggested sales on a like-for-like basis in 2025 have remained flat. However, the survey revealed that 25% of businesses had suffered a decrease in revenue and 29% had seen their revenue stagnate.

When the researchers delved into profits, they recorded that 32% of businesses had seen a decrease year-on-year while 30% recorded an increase. Just over one in ten, though, had operated at a loss in this past third quarter.

The impact on operations

With staffing costs rising thanks to the NICs changes and the lowering of the earnings threshold, businesses have made the tough call to let staff go. The poll revealed that 55% of businesses have reduced their team numbers as well as or cutting the hours that their staff can work. The average reduction in hours was calculated to be 7.3%. Cost savings have also been found in employee benefits for 23% of businesses polled and training for 19%.

For just over one in five of the business owners, this cost cutting has resulted in them closing venues completely, while 53% have also scaled back on investments.

What do hospitality leaders want from the Budget?

Echoing both the letter sent by UKHospitality and the response to the launch of the licensing review, there are three clear wants from the Autumn Budget: support with taxes, rates and labour costs.

The survey revealed that 70% of respondents want a VAT reduction for hospitality; 65% a maximum possible discount on rates multipliers and 65% want a change to the NICs reforms.

Karl Chessell, director – hospitality operators and food, EMEA at CGA by NIQ said: “High inflation, low consumer confidence and government policy have all combined to weaken hospitality. Christmas trading will hopefully boost the coffers of vulnerable businesses, but the sector will be hoping that the imminent Budget is used to deliver the targeted support that hospitality needs and merits.”

Without support, the survey suggests that businesses are facing making more staff cuts; increasing their prices and also dialling back on any investments in their businesses; and this will be bad for hospitality but also the economy as a whole.