The analysis suggests six venues a day may be forced to close next year, including 963 restaurants, 574 hotels and 540 pubs, unless the Government intervenes before April’s revaluation.
The trade body said the projected closures reflect the scale of the burden facing operators across the sector.
According to the modelling, pubs face a 15% rates bill rise from April, adding an average £1,400 in year one and £12,900 over three years, an increase of 76%.
The average hotel is set to see its rates bill rise by £28,900 next year, and by £205,200 over the next three years, an uplift of 115%.
Biz rates discount necesscary
UKHospitality is calling on the Government to raise the sector specific business rates discount from 5p to 20p, the maximum permitted in law, arguing that a hospitality wide approach is the only way to prevent widespread closures and protect the Government’s own objectives on jobs and growth.
UKH chair Kate Nicholls said the rises would result in “staggering increases” for businesses already operating on thin margins.
“Thousands of venues, particularly neighbourhood restaurants and local hotels, will be forced to close for good as a result of the significant rates rises they’re facing,” she said.
‘Disproportionately hit’
“Hospitality bears the highest tax burden in the economy and has already been disproportionately hit by increases to NICs, wages, energy and other inputs. The money coming in the front door is simply not enough to offset the rocketing cost of doing business.”
Nicholls urged the Government to implement the full 20p discount and deliver on its manifesto commitment to level the playing field between high street operators and online competitors.
The warning follows growing sector concern that a reported Government U-turn on business rates for pubs will not go far enough to support hospitality as a whole.
Last week UKHospitality CEO Allen Simpson said a pub only package would be “partial” and called for a solution that recognises that six in seven hospitality jobs sit outside the pub sector.
Trade bodies including the BII and CAMRA have echoed this stance, cautioning that the rising burden of rates, alongside increased employment costs and energy inflation, already risks making many venues unviable. The BII said that without deeper structural reform “significant closures in every community” are likely even with a targeted pub discount.
Tax experts have also argued that rates valuations must be “rooted in economic reality”, with global tax firm Ryan warning that the 2026 revaluation risks accelerating closures unless methods are modernised to reflect the true cost pressures on pubs and hospitality businesses.
UKHospitality said the Government still has time to avert severe damage to the sector but warned that failure to act in the Spring Forecast would put thousands of jobs and community assets at risk.
