UK Budget 2025: Key advice for the hospitality industry from Kate Nicholls

The UK’s hospitality sector went into Budget week hoping for clarity, stability, and, at the very least, relief. What it got instead was clarity on paper, and deeper pressure in reality.

In a special episode of What’s Cooking, Nory CEO Conor Sheridan sat down with Kate Nicholls OBE, Chair of UKHospitality and one of the industry’s most influential voices, to break down what the UK Budget 2025 means for operators across the country.

Here’s Kate’s most important advice, warnings, and practical next steps for staying resilient in a landscape that’s shifted yet again.

Budget 2025 at a glance and what it means for the hospitality industry

The headline announcements sound straightforward: wage increases, permanent small business rates relief, and frozen tax thresholds, but as Kate explains, the real impact goes much deeper. 

These headline “wins” don’t reflect the reality of how hospitality operates day-to-day.

She summarises the mood of the sector clearly:

“Despite having some warm words and proposed changes that could have delivered something meaningful, the Chancellor seems to have reneged on those promises, and that's why people are feeling very sore, very hurt and very badly let down because we were promised root-and-branch reform of business rates.

We were promised a reset and a rebalancing so that the bills were lowered on hospitality and increased on online giants, and what we've got is a solution that does exactly the opposite.”

The 2025 Budget delivers clarity, but not relief and for many operators, this means a tougher year ahead with higher operational costs.

Practical steps for operators on the ground

That said, operators need to shift quickly from worry to action. 

Kate outlines immediate, practical steps hospitality businesses can take to stay operational, build resilience, and navigate the months ahead.

Get ahead of cost increases

The biggest message? Look forward, not back.

With Budget changes on the horizon, hospitality operators can no longer simply absorb rising costs. The most effective approach is to map out the next 3-6 months and proactively plan pricing, purchasing, and labour strategies in response to upcoming changes.

As Kate advises, “How can you future-proof and plan that the sequencing of those costs that are hitting your business? How can you make some sensible and pragmatic decisions about where to take place, because there's no way people can continue to absorb the impact of this and take the hit on margin, so where can you push price?”

By anticipating cost pressures and acting early, businesses can protect margins and maintain stability in a shifting landscape.

Use technology to your advantage

Efficiency is now a necessity, not a luxury. 

Kate highlights that operators who use technology are better positioned to withstand cost surges.

As she puts it, “I think there's also a role for technology to be able to make sure you're smarter at labour scheduling and planning on labour and on stock control to make sure that you are managing that as tightly as you possibly can to match costs with demand as much as possible and avoid unnecessary costs.”

Nory makes that possible. With real-time visibility into labour, waste and margin, operators can act early, forecast accurately and stay in control. One platform, full oversight—exactly what operators need in the tough year ahead.

Plan for wage pressure

The National Living Wage uplift is substantial and necessary, but it forces operators to rethink staffing models fast. Key questions to explore:

“When you've got national minimum wage and national living wage going through, how can you look at wages and labour scheduling more sensibly?

Can you take advantage of any of those lower costs of labour that are coming through in differentials?”

Operators can no longer simply absorb wage increases, so the focus should shift to maintaining service standards while minimising wasted hours, reducing inefficiencies, and tightening staff schedules to protect margins.

Act fast on business rates

This piece of advice is key. The Budget made business rates relief permanent, but operators should be cautious. Kate puts it plainly,

“Make sure you get your appeal in on time.

You've got it; it's called check challenge appeal. So you register with the Valuation Office.

You ask to check the basis on which your valuation has been done. Some of those will be wrong.

In previous valuation periods, 30 to 40% of valuations were not correct for pubs and hospitality hotels because they are based on turnover.”

This is one of the few areas where operators can unlock immediate savings with a structured, achievable process.

Advocate loudly

The hospitality sector has never spoken with such a united voice.

As Kate points out, “I think the industry as a whole came together like never before, delivered a single coherent message to the Chancellor, explained the situation and the dire nature that we were facing, and could not have done more to get the change we need. It's the Chancellor and ministers who failed to act.”

Keeping this momentum is essential. The sector must continue to speak up, advocate boldly, and push for fairer conditions.

Understand the new consumer mood

Amid all the cost pressure, there is some good news. 

Consumers still want to go out, socialise, celebrate, and spend on hospitality.

Kate shares the data: “When you've got disposable income, what do you want to do with it? And the number one thing that they want, and it's now as high as 91%, when they've got disposable income, is to come out and socialise with family and friends.”

This could lead to a strong run-up to Christmas, a healthier January and February, and better demand and through early spring, especially with Easter landing earlier this year. 

People want to go out, so hospitality operators need to be ready to welcome them—and to do it profitably.

Don’t underestimate the mental toll on operators

This is one of the most important, most human parts of the discussion.

Hospitality operators are working harder than ever, navigating unclear government messaging, managing rising costs, and facing extreme pressures at work. 

Kate explains, “It is the mental resilience and the toll that it's taking on operators who are in hospitality because they've got a passion for it and are working so hard to try and keep the business afloat, people employed, that the toll that takes on the mental resilience that I’ve heard a lot of people saying they're just shutting up shop, they can't take anymore. And that's incredibly sad.”

This is a reminder: strategy matters, but so does support, community, and mental resilience.

What’s next for the hospitality industry?

Budget 2025 may not have delivered the reform sector had hoped for, but the industry remains resilient: united, resourceful, and better connected than ever. By staying proactive, leveraging technology, and advocating strongly, operators can navigate the challenges ahead and emerge stronger.

For more insights on how to navigate these pressures—and what to expect next—listen to the full episode of What’s Cooking with Kate Nicholls on Spotify, YouTube, and Apple.