Hospitality: What Does the Future Hold?

By Andrew Carr, Operations Director, ETC

All views shared are my own and do not necessarily reflect the views and opinions of ETC

Recent political events have shown how quickly the landscape can shift at the highest levels of government. In that sense, the hospitality sector is, for now, somewhat fortunate: the Chancellor remains in post and will deliver her next budget on 26th November. Interesting timing in the sense of how close that is to the peak season for hospitality. I expect however, that most of the changes will take effect from the start of the next fiscal year, 6^th April 2026.

What could be done to support the beleaguered hospitality sector? It’s an interesting question, as of course we must assume that the sector is in fact beleaguered. Or is it simply failing to adapt to the changing way in which people are choosing to live their lives and spend their money. Remember the demise of Little Chef and the rise of McDonald’s and other faster food outlets, driven mainly by the change in habits of society rather than economic headwinds or other factors.

Short-Term Fixes vs. Long-Term Strategy

I expect that there will be clamoring for the continuation of the Business Rates Relief, and maybe even a temporary VAT reduction, in a similar vein to what was done post Covid lockdowns.  And let’s not put the 1p on a pint of beer, because that makes a huge difference. 

However, such measures, while helpful, are stopgaps. They may enable some businesses to limp through another year, but they are short term ideas and don’t address the deeper, structural challenges.

Government policy requires a longer-term view, one that prioritises job creation and sustainable growth, so the population has money to spend. 

The hospitality sector doesn’t just need relief; it needs vision.

What Government Can Do

Central Government has a crucial role to play in creating an environment where hospitality can thrive. Here’s where the focus should be:

• Reset the Relationship with the EU Prioritise practical improvements for the hospitality sector, such as reducing the costs, friction and paperwork around fresh food imports. This would ease pressure on food inflation, which will work through the supply side for hospitality and benefit both businesses and consumers.

  
  

• Rebuild Mobility for Young Workers Secure a reciprocal agreement with the EU to enable young people (and preferably everyone) to move freely for work and study. This would significantly widen the employment pool for hospitality and ease the recruitment and wage pressures that hospitality is currently facing.

  
  

• Review Migration Policy Consider the wider migration policy within the UK.  Whilst the “small boats” dominate headlines, they account for a very small fraction in respect to total migration into the UK each year. And with the restrictions currently on our European Partners, the current sources of migration are, regretfully, not providing a workforce that the hospitality industry can use. A more nuanced, workforce-focused approach is essential.

  
  

• Invest in Infrastructure Growth in hospitality relies on basic infrastructure - from clean water to reliable transport networks. Without this foundation, no amount of tax relief will unlock long-term success.

  
  

• Create a Pro-Investment Environment It's acknowledged that everyone must pay tax, and achieving 100% fairness is an elusive goal - with diverse perspectives on how to create a more equitable or perceived-to-be-fair tax system. Striking the right balance is crucial; excessively high taxes that hinder investment and profit generation will not be beneficial. This applies not only to the hospitality sector but, more importantly, to the high-tech industry, which is vital for our progress and maintaining a competitive edge.

  
  

Local Government Has a Role Too

Local authorities must rise above internal squabbles and deliver on the job they were elected to do. That includes:

• Supporting the creation of new, flexible hospitality spaces

  
  

• Streamlining planning processes and easier application for hospitality

  
  

• Recognising that town centres must adapt and become destinations in their own right, not merely somewhere to shop. It doesn’t matter how much Councils would like; they cannot reverse the trends into online shopping - which is a permanent societal behaviour change. 

  
  

Councils need to evolve rather than harking back to some good old days, which were probably never quite as good as we remember. Policy must now reflect that reality.

What Hospitality Businesses Must Do Now

Individual hospitality businesses cannot wait for all the grand strategic plans to evolve from Government, and ultimately whilst they may be able to lobby via trade bodies and such like, these things take time, and we cannot wait. Survival - and success - demands proactive action today: 

• Plan Ahead Not just for this service, tomorrow, or next month - but for the next year - and the next five. Have a clear strategic plan and make sure the team buys it. If they don’t they need to go.

  
  

• Review Your Offering What’s your offer – does the menu reflect current trends? Agility matters more than ever.

  
  

• Get the Tech Right IT systems should be integrated and effective. If your digital infrastructure is outdated, you're already behind.

  
  

• Take Marketing Seriously Particularly online. Don’t leave it to chance - manage it actively and measure what works.

  
  

• Embrace Automation and AI Look at automation options and the use of artificial intelligence. Not to remove headcount, but to make sure the headcount you have is customer facing and adding value to every customer experience.

  
  

• Invest in People Invest in your team, recruit well, develop, mentor, reward.  Difficult in the fast-moving world we are in - but retaining key staff is more important than ever.

  
  

• Know Your Numbers Stay close to your costs, margins, and cashflow. Operational discipline is non-negotiable. Consider outsourcing a Finance Director (short or long term) to help shape your strategic plans, provide financial oversight, and safeguard your business against unexpected costs.

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Final Thought

In summary, we must avoid becoming overly focused on the government's short-term capabilities. Relief measures may help, but they won’t build resilience. 

As hospitality we need to adapt and innovate to address current challenges. Effective planning is crucial, requiring a continuous, minimum five-year strategy, clear leadership, committed staff and the courage to change.

The views and opinions expressed in this blog are those of the author and do not necessarily reflect the official policy or position of ETC Finance. Any content provided by the author is of their opinion and is not intended to malign any organization, company, individual, or group.