Britains Hospitality Sector Faces Rising Costs Job Cuts And Uncertain Summer Season

On a sunny day in Norfolk, the White Horse at Brancaster Staithe is bustling with families and summer visitors, yet beneath the surface the hospitality sector is facing severe financial headwinds. The White Horse, run by Anglian Country Inns, employs around 100 people, with one third as seasonal staff, but hiring levels have dropped this year—a reflection of national trends.

James Nye, managing director of Anglian Country Inns, highlights a wave of increased overheads impacting the industry. He notes that since April, costs have risen across virtually every area. Food price inflation, spiralling labour expenses and higher employer national insurance contributions are all putting pressure on profit margins. The increase in the national minimum wage to £12.21 per hour is compounding the burden on businesses, forcing many to pass some costs onto customers—who themselves are increasingly cautious with discretionary spending.

This difficult environment is echoed by customers like Brian and Ann Hart, holidaymakers from Suffolk, who say that accommodation and meal prices in Norfolk are noticeably higher than in previous years. Such price hikes are having a tangible effect on consumer behaviour, with some visitors reducing the frequency of their trips.

Last October’s budget brought tax increases and raised employment costs, taking effect in April. According to the trade body UKHospitality, these measures are expected to cost the industry an additional £1bn, with the sector already having shed 84000 jobs since the budget. Forecasts suggest up to 200000 jobs could be lost by March 2026. Prominent chains such as Gusto and Busaba have recently entered administration, resulting in hundreds of job losses, and pub closures continue at the rate of one per day across Britain.

Staff retention remains a challenge. Anglian Country Inns is trimming its workforce by 5% and hiring fewer seasonal staff, mirroring a 25% drop in hospitality job adverts nationwide. For young people and students hoping to enter the industry, finding seasonal work is now significantly more difficult, with many facing disappointment despite persistent efforts.

Hospitality businesses are adapting by refining efficiency and being more inventive with operations. At Socius in Burnham Market, menus are adjusted weekly to reflect both supply and price movements in local produce. Some sector leaders are calling for greater government support, pointing to previous relief such as the temporary VAT cut during the pandemic. Current government plans focus on easing planning and licensing regulations for new venues, but industry voices argue that high taxation and costs are deterring growth and investment.

Jonathan Lawson of the Butcombe Group points out that hospitality is Britain’s third largest employment sector and has the potential to drive economic growth. However, businesses worry about waning trade once the busy summer ends. The fear of carrying heavy overheads into a quieter season lingers, leaving many to question how they will weather the coming months.