– Marisa Bidois

The past year has been one of the most challenging periods hospitality businesses have faced in recent memory. For many operators, 2025 was defined by tough trading conditions, sustained cost pressures and a prolonged slowdown in consumer spending. Closures, reduced hours and difficult staffing decisions have been an unavoidable reality across the sector.

Yet as the year has progressed, there have been signs that the environment is beginning to shift. Consumer confidence, while still fragile, has started to improve, and that has translated into more people returning to cafes, bars and restaurants. Even modest increases in foot traffic can materially change the outlook for hospitality businesses, and operators are starting to see those small but important gains.

Hospitality is often one of the first sectors to reflect changes in consumer sentiment. When people begin to feel more secure, they start reconnecting over food and drink again. That trend is emerging slowly rather than suddenly, but it is a meaningful indicator that the sector may be moving out of the most acute phase of the downturn.

This improving demand sits alongside ongoing cost pressures. Wage growth, insurance, rent, utilities and compliance costs continue to rise, and margins remain extremely tight. For many businesses, the challenge is not simply attracting customers, but converting increased volume into sustainable profitability. Careful cost control, smart pricing and operational efficiency remain critical.

The regulatory environment also continues to shape decision-making. While there has been progress toward simplifying some compliance requirements, ongoing change creates uncertainty for operators trying to plan ahead. Stability and predictability will be key to rebuilding confidence and enabling investment.

Looking toward the year ahead, most businesses are not expecting a rapid return to easier trading conditions. Instead, the opportunity lies in steady momentum — a period where spending continues to lift gradually, tourism strengthens and operators are able to make measured, confident decisions again.

For operators, the call to action is to hold your nerve and focus on what will set your business up for the long term. That includes investing in training and development, even when budgets are tight. Strong leadership, well-trained teams and clear career pathways improve retention, lift productivity and enhance the customer experience — all of which matter even more in a high-cost environment.

This is also a time to lean on the support available. The Restaurant Association continues to invest in industry-led training programmes, practical resources and advocacy designed to help operators navigate change and build resilient businesses. From workforce development initiatives to benchmarking tools and compliance guidance, there are ways to strengthen your operation without having to do it alone.

Despite the challenges of the past year, hospitality remains a resilient, adaptable sector. With steady consumer confidence returning, clearer signals ahead and a renewed focus on people and capability, businesses can begin shifting from survival to sustainability. The year ahead may still require caution, but it also presents an opportunity to invest in the foundations that will support long-term success.