The proportion of leaders feeling confident about the future of hospitality in general is even lower at 15%. Both figures are up by just one percentage point from the last Business Confidence Survey in early 2025 and 19 percentage points below the levels of May 2024.

Optimism has been weakened by rising costs—especially through sharp increases to National Insurance contributions and Minimum and Living Wage levels from April.

Four in five (80%) leaders report that wage bills are now significantly higher than they were 12 months ago, and nine in ten (91%) say increased employment costs are a concern for the next 12 months. Significant numbers of leaders are concerned by increases in business rates (73%) and inflation in the cost of food and drink (61%).

Confidence has been damaged further by cautious consumer spending in 2025 after a strong end to 2024. A third (34%) of leaders say their first-quarter revenue fell year-on-year—nearly as many as the 37% recording an increase.

The danger of failure is forcing many employers to cut employment costs. Nearly two thirds of leaders have reduced the staff count (65%) and / or cut the hours available to their staff. Significant numbers have deferred pay increases (40%) and reduced spending on employee benefits and training (both 29%).

Karl Chessell, director - hospitality operators and food, EMEA at CGA by NIQ, said: “The double whammy of higher costs and softer trading have hit hospitality businesses hard, and it’s no surprise that confidence is running low.

“It is particularly frustrating that so many of the increases in employers’ outgoings—from labour bills to taxes to inflation to compliance with legislation—are out of their control. These costs are choking hospitality businesses and compromising the investment and employment that are so important to the UK economy. The longer term outlook for the sector remains good, but it deserves much better support than it is currently getting.”

More positive news from the survey includes a quarter-on-quarter increase in the proportion of independent operators feeling optimistic about prospects for their business in the next 12 months, from 12% to 21%. There has also been some relief on energy bills, with well over half (57%) of leaders reporting these have decreased year-on-year.

Paul Watson, Sona’s vice president of hospitality, added: “The hospitality industry is continuing to endure a storm of economic challenges, stifling growth and draining productivity. From a labour standpoint, now more than ever, ensuring that every rota and schedule is fully optimised is incredibly important.

“Having the right digital solutions in place is a game changer – it supercharges decision-making and ensures businesses are operating at peak efficiency, 100% of the time. Now isn’t the time to weather the storm, it’s the time to empower businesses to operate as efficiently as possible in order to help them trade their way out of trouble.”