While the UK enjoyed its warmest and sunniest spring on record, hospitality businesses—especially small hotels—have been grappling with stormier economic realities. Chief among them is the significant increase in wage costs brought on by April’s uplift in the National Living and Minimum Wages, alongside changes to National Insurance. For many, this has meant a sharp rise in operating costs, with labour now the top financial concern heading into the next 12 months.
Recent industry research shows that 80% of operators have seen their wage bills climb, and nearly a third experienced falling profits in the first quarter of the year. It’s a tough pill to swallow, particularly after the challenges of the past few years.
Yet there are glimmers of hope. The same wage increases that stretch budgets may also boost spending power. A notable portion of UK consumers—particularly younger ones—have received recent pay rises, and many are spending more on leisure, including hotel stays, dining and drinks. Encouragingly, over a third of these consumers say they plan to go out more often, citing both increased income and a desire to support the industry.
For independent hotel owners, especially those who cater to younger demographics or offer food and beverage services, this could signal a much-needed uplift in footfall and spending.
The pressures are real—but so are the opportunities. With smart planning and guest-focused service, small hotels can ride out the storm and be ready for sunnier times ahead