Taxed out of existence

Unquestionably, the closure of international travel (2020-2022) in response to the COVID pandemic had a devastating affect on tourism worldwide.  Repercussions still reverberate several years after the fact.  Nothing better exemplifies the economic aftershocks than the hospitality industry.

April 7, 2023, Black Bull Brew Pub, Etal, UK

Ever and always intrusive, politics compound the problem(s).  For example, in response to the imposition of tariffs in 2025 by the current Administration, Canadian tourism to the US has declined a cool 22% to 30%, resulting in a net $4.5 to $5.7 billion dollars of lost revenue.  The tourist boycott is acute in border states like Montana, New England, and of course the snowbird haven of Florida.  It continues unabated--with closures of hotels, restaurants, retail and even breweries as the net result.  

In the UK, hospitality measures are just as dire.  Perhaps more so.  The quintessential feature of British society--patronizing the local pub--is being hollowed out.  The Society of Independent Brewers and Associates (SIBA UK) found 1,086 pubs closed in 2025 nation wide, with 137 fewer breweries at the start of 2026 compared to January 2025 (dropping from 1,715 to 1,578).  Closures are accelerating, and it looks like 2026 will be a make or break year.  The survival of British independent brewing is at stake.   

2025 saw the highest annual closure rate of breweries since 1974, with Britain losing nearly three independent breweries each week.  Rising raw materials (malt and hops) along with increasing energy costs and reduced consumer spending are squeezing margins.  Worse, corporate consolidations are ongoing of successful independent brewers. They are being gobbled up by large multi-national beverage firms, further reducing competition.  A last man standing approach.

Meanwhile, having a pint is getting more difficult.  Increased employment pressures and rising taxes weigh upon those independents that remain.  Hospitality businesses in the UK are being taxed out of existence.  Point in case, according to UKHospitality, the average hotel expects its business rates to increase £28,900 next year, with an increase to £205,200 over the next three years.  That reflects a 115% increase in business rates.  

Who can sustain that kind of governmental brigandry?  As for the average pub, it is projected to face only a 15% increase in business rates next year, an extra £1,400.  But it will also sustain a 76% increase up to £12,900 over the next three years.  Who?  The answer is: no one.

Labor-wise, 2025 has been challenging with an historic severe labor shortage of about 170,000 vacancies.  Over all, hospitality accounts for roughly 7% of all UK jobs (~2.6 million).  But operational costs are rising.  Curiously, employment dipped in December 2025 by 20,000 positions, when it typically would be rising in time for the holidays.  Likely, it reflects the ongoing business closure rates...a vicious Catch-22.  

March 31, 2023 Berwick, Northumberland

Pressure is mounting as increased living wages and Employer National Insurance contributions take yet another bite out of business margins.  UKHospitality cautions that 2,076 venues are at risk of closure without tax relief in 2026.  Without intervention, an average of six hospitality venues could close each day in 2026.  The inflection point has been reached.  Trying to wring blood from a turnip is no longer useful.  Neither is beating a dead horse.  If it is to have a pint at all at the end of the day, Britain must have relief.