Hospitality trade sees growth again in December

By Hamish Graham

Published: 13 February, 2025

New data from the Office for National Statistics (ONS) can reveal hospitality had another strong month in December 2024, with output for the food and drink sector growing 2%. This made it the largest contributor to growth for the wider consumer-facing services industry.

This strong festive showing follows a positive November when the food and drinks sector also grew, with a 1.6% rise in output seen then. The second month of growth on the trot will buoy the trade, though many in the industry will be wary that the incoming £3.4bn cost rises due in April could hamper the positive momentum of the trade.

These rises include the dual impact of increases to businesses’ national insurance contributions (NICs), as well as the increases to the national minimum wage and national living wage. NIC increases will see more than 774,000 workers newly eligible for employer national insurance contributions, representing 63% of the workers who were previously ineligible.

Kate Nicholls, chief executive of UKHospitality, wants the government to take heed of the industry’s recent strong performance and relieve it of the burden of increased NICs to allow it to continue to prosper.

“We’ve seen over the past few months that hospitality is delivering reliable economic growth, despite the challenging economic circumstances the sector continues to face.

“Hospitality’s resilient growth is something the government should be backing, but instead it is stunting the sector’s potential by inflicting such damaging costs on businesses.

“Driving growth is rightly the national priority and hospitality can be the vehicle, if the government rethinks its regressive changes to employer NICs.”

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