Cautious confidence as hospitality closures slow in first quarter


The latest Hospitality Market Monitor from CGA by NIQ and AlixPartners shows that closures in Britain’s hospitality sector slowed from eight sites a day in 2023 to four a day in the first quarter of 2024.

According to the research, the current total of 98,745 hospitality venues (pubs, bars, restaurants, hotels and other forms of licensed premises) means the market is down by2.5% year-on-year, meaning one in 40 venues has shut in the past 12 months. However, the latest three-month snapshot provides cautious confidence that a slight easing of cost pressures may be starting to put the brakes on business closures.

The Hospitality Market Monitor shows positive trends in the eating-out side of the market with casual dining and independent restaurants driving the modest revival, seeing growth of 0.5%. Overall food-led site numbers increased by 0.1% in the first quarter of 2024, compared to drops of 0.7% and 0.4% in the drink-led and accommodation businesses. Despite improving trends, the independent restaurant segment remains vulnerable, experiencing a 22% decline between March 2020 and December 2023.

The Monitor also reveals that managed multi-site hospitality groups have had a resilient start to 2024. While the independent and leased segments of the market contracted by 0.4% and 0.7% respectively in the first quarter, numbers in the managed channel were virtually level with December 2023. Some groups have been forced to close sites in early 2024, but many vacated premises have been swiftly reoccupied by new operators.

Karl Chessell, CGA by NIQ’s director – hospitality operators and food, EMEA – said, “After a very challenging few years, these numbers give grounds for tentative optimism that hospitality closures will slow as 2024 goes on. While thousands of businesses remain fragile, a downward trend in inflation should hopefully raise the confidence of operators, consumers and investors alike, and protect more venues from closing the doors. It is particularly encouraging to see a marginal return to new openings for both casual dining and independent restaurants, though sustained growth is likely to be some way off.”

Kate Nicholls, Chief Executive of UKHospitality, said, “Four hospitality venues closing a day is still four too many. These closures rob communities of all the benefits hospitality serves up for Britain – the crucial job opportunities, local economic growth and hubs for communities.

“However, this data gives some signs to suggest the sector is beginning to recover. A slight growth in both casual dining and independent restaurants indicates a potential growth in an appetite for investment in the sector.

“While nascent, these are positive signals, albeit at a time when the sector continues to face tough economic challenges, which continue to put at risk the many benefits hospitality delivers to Britain.

“The closure rate may have halved, but we’re still losing venues and that is not acceptable. It remains the case that the cost burden for the sector is too high, and we need to see those costs rebalanced and reduced, if we are to build on some of the growth we are seeing.”