As people across Scotland gather in their favourite bars and restaurants this festive season, celebrating Christmas parties, family get togethers’ and nights out with friends, the licensed hospitality sector is facing a financial shock that threatens the very venues that bring communities together.
The latest non-domestic rates revaluations have delivered unprecedented and unsustainable increases for many licensed hospitality businesses, with many pubs, bars, restaurants and hotels seeing their rateable values rise by over 200%, with one particular operator seeing one of his venues rise by over 530%. For a sector already under extreme pressure, this represents a tipping point, and it begs the question how can this reasonable, fair, or affordable?
Hospitality businesses operate on some of the tightest margins of any industry. At the same time, operators are grappling with rising wage costs, higher employer National Insurance, escalating energy prices, food inflation and growing regulatory costs. Business rates are a fixed cost that cannot be reduced, and these increases simply cannot be absorbed.
Stephen Montgomery, Director of the Scottish Hospitality Group, said:
“Behind every bar and restaurant are teams of people, chefs, bartenders, servers, cleaners and managers, who work tirelessly to create more than just great food and cocktails. They create warm, welcoming spaces, places where memories are made, friendships are celebrated and communities come together.”
“When customers sit down to enjoy a Christmas meal or raise a glass with friends, they are experiencing the result of enormous effort, passion and rising costs, all of which is invisible to the consumer.”
Montgomery added:
“When people are enjoying their Christmas nights out, they are seeing the very best of hospitality, with phenomenal food, great cocktails and welcoming atmospheres, all of which are created by amazing teams. What they don’t see is the relentless pressure behind the scenes that is pushing many businesses to breaking point.”
Hospitality operators are doing everything they can to protect jobs, maintain standards and keep prices as fair as possible. But there is a limit. Rising fixed costs like business rates inevitably lead to difficult decisions, like reduced opening hours, fewer staff, scaled back investment, higher prices, or, in the worst cases, permanent closures.
“No operator wants to cut hours, raise prices or lose staff, they want to open longer, reinvest in their venues, and expand their businesses,” Montgomery continued. “But when fixed costs like business rates jump overnight, those decisions are forced upon businesses through no fault of their own.”
The question for all of us is simple:
What would Christmas, or any time of year be like without your local bar or restaurant?
“Our pubs, bars and restaurants are not just places to eat and drink,” said Montgomery. “They are the heartbeat of our high streets across cities, towns, villages and communities. They are a place where friends meet, love grows, where memories are made, and families spend special occasions. Take them away and you don’t just lose businesses you lose jobs, social spaces, memories, and the character of our towns and high streets.”
Licensed hospitality is not a luxury. It is a cornerstone of Scotland’s economy and a major employer across urban and rural communities alike.
Montgomery concluded with a clear message ahead of the Scottish Budget
“Our message today is very clear and very simple. At this Scottish Budget, the Scottish Government has the chance to lead, and to take licensed hospitality in Scotland down a different road.
We urge the Scottish Government not to repeat the mistakes of the most recent UK Budget, where hospitality has again been left crippled, only this time by the impact of business rates. If licensed hospitality is pushed beyond breaking point, Scotland’s economy will suffer.”
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“Therefore, support must apply to all licensed hospitality businesses. That means lifting support above the current £51,000 rateable value threshold and removing the £110,000 cap on claimable relief.”
“We have a strong and constructive working relationship with the Scottish Government and with all political parties, and we stand ready to continue working collaboratively to achieve a solution that works.
We have the evidence. We have practical solutions. What businesses cannot survive is silence, delay, or denial of the true scale of this problem.”
