The number of Scottish pubs, restaurants and hotels which expect to close because of “brutal” trading conditions has more than doubled, industry research has found.
The Scottish Licensed Trade Association (SLTA) said 75% of outlets had seen a reduction in profit during 2025.
Rising costs in areas such as employer national insurance contributions, wages and rates are said to be making it much harder for business owners to stay solvent.
An alarming 70% of outlets in decline or considering closure, and 59% expecting to make a loss in 2025.
Over 350 pubs, bars, restaurants and hotels, covering the full spectrum of licensed hospitality businesses, contributed to the survey – with the continued challenges facing the hospitality sector, driven by a challenging economic environment and visitors and customers with less disposable income, coming across loud and clear in its worrying findings.
Colin Wilkinson, SLTA managing director, said: “We’ve spoken repeatedly about the many challenges Scotland’s licensed hospitality sector continues to face. In recent years, it navigated the stormy waters of Brexit, the Covid pandemic, rising utility bills, and the ongoing cost-of-living pressures that have impacted on businesses’ operating costs and consumer spending.
“However, in the 10 years that we have been conducting our market insight surveys, these findings are the most negative we have seen – these insights are extremely concerning and the only word to describe the current trading conditions is ‘brutal’. There has never been so much business uncertainty.
“Spiralling costs to businesses from the Chancellor’s hike in employers’ NICs in the Autumn Budget, which took effect in April alongside increases in the national living and minimum wage, are having a devastating impact on Scotland’s pubs, bars, hotels and hospitality venues.
“Businesses are reporting lower income as a result of current low consumer confidence and reduced footfall – and, of course, we continue to call on the Scottish and UK governments to work to support one of our key industries. The most effective way to achieve this is by reducing VAT in the licensed hospitality sector and an urgent review on the commercial rating system in Scotland.”
Mr Wilkinson added: “It is more important than ever that the Scottish Government finally accepts that hospitality is one of Scotland’s key industries and plays a crucial role in tourism, economic prosperity and employment.
“So, it comes as no surprise that respondents to our survey have voiced major concerns about the economy, and the economic policies of both the Scottish and UK governments – well over 90% do not think their policies are aligned to growing their businesses. With 59% of outlets expecting to be loss-making in 2025, the outlook is not positive.
“Ahead of the Holyrood election in 2026, we asked respondents what is the biggest single thing that they would like all parties to include in their manifestos, and rates reform, to bring Scotland at least into alignment with the rest of the UK, was the biggest issue, with notable mentions for hospitality work visas and promoting the hospitality sector.
“The increase in employers’ NICs has impacted staffing and opening hours, with nearly one-third of outlets cutting staffing levels, our survey insights reveal. Add to the equation the ongoing regulatory hurdles and bureaucracy that businesses have to deal with on a daily basis and it’s no wonder that many owners are at the end of their tether.”