Abban Magos – Associate Director, LM
With the April 2026 Business Rates revaluation now in effect, businesses across the leisure and hospitality sector are coming to terms with an increase in business rates in the region of 10%. This, paired with the end of the Retail, Hospitality and Leisure (RHL) scheme, which provided businesses with a 40% discount on business rates, will undoubtedly place further pressure on the hospitality sector.
The much-loved pub sector is most at risk. Despite the announcement of an £80m support package for pubs and music venues following significant backlash against November’s budget, for many venues – these measures offer temporary relief, not a lifeline.
The general decline in this sector over the past two decades has shown no sign of slowing with hikes to UK minimum wage increasing staff costs and outstripping inflation. Increases to alcohol duty have also had a significant impact, now accounting for around 25-30% of the cost of a pint. Pair all of this with the current geopolitical environment that is inflating energy prices and knocking already weak consumer confidence and the outlook for the hospitality sector remains bleak.
Large pub groups are also not immune to the cost squeeze with many attempting to future-proof by focusing investment into their existing estates over new site acquisitions while disposing of poor performing sites. Recently, we have seen the collapse of BrewDog, which was sold for £32.9m, despite having a valuation at nearly £1 billion in 2017. JD Wetherspoon’s founder, Tim Martin, has been highly critical of the 2026 revaluation stating that it will put the future of high streets in medium and small towns at risk, increasing vacancies.
Perhaps the most troubling figures have come from UKHospitality, with warnings that business rate increases could force 1 in 7 venues to close and lead 64% of businesses to cut jobs with investment plans halted and trading hours cut.
The hospitality and leisure sector play a key role in keeping our high streets vibrant, providing employment for young people and generating income for the government through taxation. It is imperative that the hospitality sector receives far greater support than the Government is currently prepared to offer. Businesses are calling for meaningful reform, including a fundamental overhaul of the business rates system, a reduction in VAT for hospitality, changes to employer National Insurance contributions, and a more permanent extension of the RHL scheme.
While there is no silver bullet to solve the challenges facing the hospitality sector -immediate intervention from the government is imperative to ensure the survival of this vital industry.
