The phrase “only connect” was invented by EM Foster in his novel Howard’s End and refers to the idea of linking the head and the heart – thoughts and feelings. But I prefer a different interpretation of only connect – emphasising the concept of forging human relationships, even if only brief ones. And I think this social element lies at the heart of the hospitality industry. 

 

It matters more than ever now, in a post-lockdown era when people are staying at home rather than going out. Instead, they are communicating virtually and having fewer conversations in real life. Yet basic human interaction is fundamental to happiness, and it is why people want and need to eat and drink out – because when they do so, they meet other people.  

 

But going out for a meal, a pint or a coffee isn’t just about seeing friends or making new ones. It is also about the loose attachments with the staff who serve you, and other customers who you may never see again. 

 

Since human settlements began, tribes have enjoyed convivial gatherings over food and drink. Taverns have been the linchpin of villages in Britain for many hundreds of years – locals where people could meet and gossip, laugh and set the world to rights. In cities, coffee houses arose in the 18th century to fulfil a similar role, but without alcohol. Technology is no substitute for real company. 

 

Some years ago, I owned what was then considered Britain’s most famous and fashionable restaurant – The Ivy. The secret of its legendary dining room was not really the food or the décor – it was the service.  The Ivy had the best brigade and most charming serving staff in London – from the second you were greeted by name at the entrance to the farewell when you paid your bill.  That was why it attracted far more famous, rich and powerful people than any other eating place in London – they wanted to connect. The people were the magic, which made every visit to the restaurant so special.

 

Of course, thousands of other venues also employ friendly and engaging hosts who make their guests feel warmly appreciated. And that connection is what fosters customer loyalty more than anything, in my opinion. But rising labour costs threaten the current business model for so many restaurants, pubs, cafes and leisure establishments. Next month, the national minimum wage rises to £12.21 per hour – almost 50% greater than it was in 2019. This is a relatively higher figure than it is in many similar countries. 

 

The increase in pay rates is particularly tough on restaurants, because customers also pay tips, which by law, must go to the staff. This means than in successful locations, waiting staff can earn £30 or more per hour. It is a good thing that restaurant staff can earn perhaps £1,000 a week, but with rising national insurance and other costs associated with employing people – and the new Employment Rights Bill only increasing those costs – labour heavy businesses are seeing their margins shredded and their returns collapse. That will lead to less investment and more closures.

 

Fine dining restaurants charging £100 a head or more can afford the staff costs needed to deliver high touch service standards. But quick service restaurants cannot, so they are automating kitchens and front of house. Increasingly, ordering is done in such outlets via touch screens, and the human interaction is significantly reduced. It seems Generation Z might even prefer this sort of robotic transaction. It is probably the way ahead for fast food.

 

But I know I hate it. I recently went into a coffee shop which is part of a trendy, fast-expanding chain. All ordering had to be done through screens – which attempt to upsell you lots of choices you don’t want. The coffee was presented via a hatch – I barely saw a member of staff during the entire visit. But the coffee was no cheaper than at Gail’s, which, I’m pleased to say, still passionately believes in a social experience: the power of a smile, an exchange of pleasantries, perhaps even a gentle joke.

 

Research shows that minimal social interactions with strangers have real psychological benefits. Small talk can enhance your mood and improve your empathy; friendly, casual conversations remind us that generally, the world is full of decent individuals – they are almost invariably more well disposed towards us than we might imagine.

 

Gail’s is popular partly because we mainly trade in communities where people live and can act as hubs for regulars to meet old friends or make new ones. Terrible events like lockdowns serve to remind us that relationships are the absolute cornerstone of all human contentment. Our best times, our favourite memories, almost everything that makes life meaningful: these emotions are based around relationships – both close ones but also fleeting ones. These happen when you are in the room, not while you are glued to a smartphone and wearing earphones.

 

In all this, I may be a Luddite fighting the unstoppable tide of digital communications and even artificial intelligence. Part of the reason I rarely order delivered meals to eat at home is that I relish the whole immersion of going out to a venue: the buzz, the company, the bustle, the laughter, the shared experience. To me, this is living – humankind has been gathering to eat and drink together since time began. We lose such vital and visceral encounters at our peril.

The impact of the two major changes to national insurance contributions for employers, starting on 6 April 2025, are startling. The exact cost has been tough for businesses to budget as you need to get into very granular detail to do so accurately, but for an employee earning national living wage working 40 hours a week, there is set to be a 51% increase in the employer’s national insurance bill. The value of the impact naturally depends on numbers of employees, but it is also linked to the mix of employees.

 

National insurance increases are not the only cost rise in the pipeline. There is a 6.7% rise in the national living wage coming, and a 16-18% rise in the national minimum wage (for those aged 16-20). Again, the impact these changes will have will vary, with businesses who take on more staff under the age of 21 set to be hit by a greater percentage cost increase than those with older staff. But the bottom line is all businesses will be affected.

 

The business rates relief, currently at 75%, will also reduce to 40%, though this will continue to be capped at £110,000 per business. The greatest impact of this change will be felt by smaller businesses that hadn’t yet hit the cap, as there will be a 35% increase in rates payable. In short, margins are being squeezed, staff costs are creeping towards 40% of turnover and breaking even, never mind turning a profit, is becoming ever more challenging.

 

Within the industry, there is an almost universal expectation that prices will rise as a result of the barrage of cost increases. Eating out or going for a drink, whether a coffee or a beer, will cost more. With many reporting a tough start to 2025, it will be interesting to see how this impacts consumer demand and sales volumes going forward. Price rises will also drive inflation, and the Bank of England has confirmed it is expecting a rise in 2025.

 

Staff retention continues to be a huge focus for operators as experienced staff are more efficient, know what the consumer wants from the business and often build relationships with regulars, driving sales. Retention also reduces recruitment fees, which soon add up when churn is high. We see such a wide range of benefits these days to encourage retention, far beyond the typical staff discounts and free food. Businesses are focusing on professional development opportunities, offering events or trips with team building and educational focuses, and reviewing non-cash recognition and rewards.

 

From a corporate structure point of view, we are seeing an uptake in group reconstructions. Businesses are often started with one company for every site, and established groups can end up with quite convoluted group structures no longer fit for purpose. More companies in the group means more administration for the finance team, and more time and cost for compliance work such as accounts preparation, business tax computations and audits. All of this time and cost soon adds up. A review of the structure can take up time and does incur a one-off cost, but the benefits in the future can be significant, with a saving on professional fees and greater finance team capacity to work on other more commercial matters.

 

In an attempt to reduce some of the impact of the national insurance increases, salary sacrifice schemes are becoming more popular. Pension salary sacrifice means an employee agreeing to a reduced salary in exchange for employer managed pension contributions. The reduced salary means lower income tax for the employee, and lower national insurance contributions for both the employee and the employer. The main benefits of implementing this are it is an attractive benefit for employees wanting to save into their pension, while also saving costs for the employer. The only word of caution around this is that it is important the arrangement does not bring the employee below the national living or minimum wage thresholds.

 

There is no silver bullet, but if the hospitality industry is one thing, it is resilient. Hopefully the majority of businesses can weather the storm, but we will, without doubt, see companies going into administration and sites closing, reducing the variety of what is on offer for the consumer. We will also see consolidation in the market, as the larger groups with plenty of capital and financial backing takeover smaller operations that are struggling to cope.

As I write, the world, or a small part of it, is waiting more in hope than expectation for chancellor Rachel Reeves to respond to protests, led by the hospitality industry, against the Budget measures – including increases in employers’ national insurance that will kick in next month.

 

A survey among operators carried out by industry bodies suggests that if the plans go ahead, a large majority will be reducing their staff count, and around a third will cut their opening hours. It’s estimated that 9,000 pubs are at risk of closure.

 

Alongside “potentially worsening unemployment and socioeconomic inequality”, commentator Peter Backman points out in his weekly briefing that, “the decline in UK pubs and restaurants also threatens cultural heritage, damages social cohesion and accelerates community isolation, particularly in rural areas, where pubs often serve as the last remaining public gathering spaces”.

 

Yet, as the British Institute of Innkeeping noted when it launched its last-ditch Our Pub campaign last week, “the value they deliver in social mobility through accessible skilled jobs, and providing human connection to those who would otherwise see and speak to nobody, has been constantly referenced and applauded by government” – with no apparent consequence in terms of policy.

 

Whatever Reeves finally decides, and whatever government is in office, it seems to me that the trade is going to have to keep fighting for its life until the value of pubs, in all its dimensions, is recognised not just by individual ministers and MPs (who know where their votes come from), but in some permanent way, by the state.

 

And to do that, it’s going to have to define “the pub”, which, if a new book by Cambridge geography professor Philip Howell is anything to go by, is not going to be easy.

 

Simply titled Pub, this tiny volume is part of the Object Lessons series from Bloomsbury Publishing, which challenges a lofty academic to focus on some everyday thing. Previous titles have included Hotel, Wine and Newspaper.

 

Howell sets about the task by breaking up the pub into its component parts, telling some interesting stories along the way, but by the end, he has to admit that, “like other objects, the pub will in fact remain mysterious, impossible fully to account for”.

 

This is typical academia. If professors were successful in explaining everything to everybody, they’d eventually do themselves out of a job. But Howell goes on to gloss his conclusion in a more interesting way, describing the pub as “a thing that exceeds our attention”. The notion of excess – that pubs are more than the sum of their parts – is something I’ve been playing with in my own attempts to grasp what they mean for us.

 

It relates to the idea that pubs exist in two places at the same time (bear with me here), which is likely to throw your average geographer, I suppose. So, pubs are at once businesses – economic entities that must make a profit – and at the same time, social spaces where lots of things happen that are unquantifiable in economic terms, but have great value for human beings. You could say these things are paid for vicariously, via the food and drink tab, but there is clearly going to be an excess.

 

Geographically, you can render this as a public space mapped on to a private space. There are two different places jostling together. The excess can also be architectural. I’ve always been interested in a pub’s dead zones. The parts of the trading area where people don’t want to go. Narrow parts and corners by the toilets, for instance. 

 

Perhaps more important are the dead times. The good operator’s challenge is to turn these into profitable spaces, profitable dayparts, and as pressures mount on the trade, I’ve noticed much more effort going into this. But there are always bits left over. Design quirks and the ebb and flow of a trading day. These bits complete the pub, help create that elusive undefinable “atmosphere”.

 

So, if the state is really going to protect the pub, it has to do so not on mere economic grounds (though you might argue that should be enough). Nor is it helping when MPs raise a glass or pull a pint at a local they’ve never been in before. That’s just a photo opportunity.

 

Only when the pub is acknowledged as a thing of value in itself – gathering up all that excess without which it would not be a pub, embracing its unabashed unprofitability – will we be able to rest. Trust me. I’ve got an A Level in geography.

When we speak to hospitality businesses, it’s increasingly clear that sustainability is shifting from a “nice-to-have” ethical choice to a core imperative – one that guests expect and staff demand. As an industry in the midst of tackling some significant headwinds, the real challenge isn’t recognising its importance but finding practical and financially viable ways to integrate sustainability into operations.

 

The most successful hospitality businesses today are those that understand the need to balance environmental goals with strategic business objectives. By embedding sustainability into the fabric of our operations – through transparency, collaboration and a people-first mindset – we can drive meaningful change that not only benefits the environment but also sets us up for long-term growth and success. Right now, that means action that delivers on the P&L.

 

A recurring topic in our conversations with operators is how to effectively navigate the continually evolving regulatory landscape. This is particularly true in areas like food safety, allergens and traceability. Take the recent allergen guidance from the Food Standards Agency (FSA), for example. It now requires the out-of-home sector to provide written information on the 14 allergens and foster proactive conversations to ensure consumer safety.

 

Businesses leading in this space prioritise transparency – clearly displaying allergen information to create a safe and trustworthy environment for guests. This transparency not only builds loyalty and strengthens credibility but also drives repeat visits. There are lessons here for us all when it comes to integrating sustainability.

 

At its core, this is about open communication with both customers and teams. By focusing on kitchen traceability, clear labelling and thorough staff training, sustainability becomes a genuine, ongoing commitment – and customer conversation – not just another checkbox. It ensures we’re delivering safe, reliable, and responsible dining experiences.

 

As we explore practical and financially viable ways to integrate sustainability, technology has become one of the most powerful levers. Balancing cost pressures with sustainability goals is challenging, but the good news is operators increasingly understand that they don’t have to do it alone. When approached strategically, technology can drive efficiency, enhance business resilience and help build trust with both customers and employees – all while supporting long-term profitability.

 

Collaboration plays an ever-more vital role here. Whether it’s working with suppliers to ensure greater transparency or adopting digital tools to track data and improve visibility, technology empowers us to make smarter, more informed decisions. From monitoring carbon emissions to ensuring allergen compliance, these tools help businesses stay ahead of regulations and transform compliance risks into opportunities for growth and increased consumer confidence.

 

We can see from our own research that sustainability is a growing priority for customers. Our latest study, Sustainability Matters: What consumers want and how brands can respond, reveals 37% of consumers are willing to spend more on brands with strong green credentials, and 41% want carbon footprint labelling on menus. Customers are actively looking for brands that demonstrate transparency and meaningful action on sustainability.

 

For operators, this means showcasing sustainability efforts – like carbon labelling or ethical sourcing – will not only build trust but strengthen customer loyalty. But sustainability isn’t just about attracting customers; it’s also about attracting and retaining the right talent. We’re seeing more employees, particularly in the hospitality industry, aligning their personal values to where they choose to work. Businesses that do not demonstrate a real commitment to sustainability risk losing the battle for talent. This is because 76% of hospitality staff and 88% of management say they’re more likely to stay longer with employers who make a positive environmental impact.

 

At a time when cost-cutting and staff turnover are pressing concerns, embracing sustainability presents the opportunity to build a motivated, engaged workforce and can play a part in driving retention. It is clear from the research that strong sustainability practices help create a workplace culture where staff feel more aligned with the company’s values, contributing to a more resilient, profitable operation in the long term.

 

Sustainability is increasingly central to hospitality operations, with both customers and employees prioritising it more than ever. The businesses that will thrive are those that see sustainability as a strategic asset – one that enhances collaboration, harnesses technology and fosters transparency to create long-term value. It can drive brand reputation with guests and employee retention within teams, and as such, offers a potential competitive edge in the market. When approached strategically, sustainability is not just a responsibility; it’s an opportunity to unlock growth, profitability, value and, ultimately, resilience for hospitality in the long term.