April 2026: What UK Hospitality Owners Need to Know Right Now

The April Cost Cliff: Wages and Rates

National Living Wage goes up 4.1%

From 1 April, the National Living Wage rises to £12.71 per hour. If you've got a team of hourly-paid staff — and most hospitality businesses do — this is a real cost increase. On top of the Employer National Insurance rises you've already absorbed, this is another margin squeeze landing right when you need it least.

Business rates are changing (and it's complicated)

Here's the mixed news:

• If you run a pub or live music venue: You're getting a 15% discount on your new rates bill, and rates are frozen for two years. That's a genuine win after months of industry campaigning.
• If you run a restaurant: Brace yourself. Business rates could rise by up to 45%, depending on your location and property value. Some venues are seeing even steeper increases.
• If you run a hotel: Rates could jump by 115% in some cases. This is a serious cash flow hit.

The timing couldn't be worse — wage costs up, rates up and both landing in the same month.

The Employment Rights Bill: What's Changing

Parliament is working through the Employment Rights Bill, which will introduce new rules around:

• Zero-hours contracts – Stronger protections for workers, which means less flexibility for you
• Flexible working rights – More formal processes and potential costs
• Holiday pay rules – Changes to how rolled-up holiday pay works

If your business relies on flexible staffing (and most hospitality businesses do), this adds complexity and potentially cost. It's worth getting ahead of this now.

What You Should Do Right Now

1. Review your break-even point

With wages up 4.1% and potentially significant rates increases, your break-even point has shifted. Do you know what it is now? If not, that's the first conversation to have.

2. Stress-test your margins

Look hard at:

• Your gross margin % (food, drink and rooms combined)
• Your labour % of turnover
• Your food/drink mix — are you selling the right products at the right price?

A small margin improvement in any of these areas could offset the April cost increases.

3. Model your pricing

You may need to increase prices. But by how much? And where? Rather than guessing, model a few scenarios:

• What if you increase prices by 3%? 5%? 8%?
• Which items can you increase without losing customers?
• Where's the sweet spot between protecting your margin and keeping customers happy?

4. Plan your staffing

With wage costs rising, do you need the same number of staff at the same hours? Could you:

• Reduce hours slightly without hurting service?
• Invest in training to improve productivity?
• Rethink your menu to reduce kitchen complexity?

5. Get your numbers in order

If you don't have up-to-date management accounts showing your margins, labour % and cash flow, now's the time to create them. You can't make good decisions without good data.

The Upside

It's not all doom and gloom. Industry forecasts suggest that:

• Consumer confidence should improve in the second half of 2026 as inflation eases and interest rates potentially fall
• Domestic tourism and leisure spending should remain stable
• Customers are still going out — they're just being more selective about where

If you get your costs and pricing right now, you'll be well-positioned to benefit from that improvement later in the year.