Hospitality closures slow in Q1 2024

Closures across 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 latest Hospitality Market Monitor from CGA by NIQ

The exclusive research points to a 0.4% decline in total numbers between the start of January and the end of March – the third smallest quarter-on-quarter drop since the start of the Covid-19 pandemic. 

The current total of 98,745 hospitality venues (restaurants, hotels, pubs, bars and other forms of licensed premises) means the market is down 2.5% year-on-year, so one in 40 venues have shut in the last 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 monitor shows positive trends in the dining out market segment; food-led site numbers increased by 0.1% in the first quarter of 2024, compared to drops of 0.7% and 0.4% in drink-led and accommodation businesses. 

This marginal growth has been driven by a modest revival for casual dining and independent restaurants. These two segments recorded a combined net decline of 21% of sites between the start of the pandemic in March 2020 and December 2023, but appear to have stabilised and achieved 0.5% growth in the first quarter of 2024. Despite improving trends, the independent restaurant segment remains vulnerable, experiencing a 22% decline between March 2020 and December 2023. 

Managed multi-site hospitality groups have had a resilient start to the year, the monitor reveals. While the independent and leased segments contracted by 0.4% and 0.7% respectively in Q1, numbers in the managed channel were virtually level with 2023, but many vacated premises have been swiftly reoccupied by new operators. 

'Still four too many'

While it is encouraging to see a decline in the rate of closures, many hospitality businesses remain under significant pressure and are by no means out of the water just yet. As Kate Nicholls, CEO of UKHospitality, says: "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 touch 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 of the 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."

You may also be interested in…