Adapting, innovating, surviving: Hospitality’s 2025 journey

After a wave of pub closures, a continuing cost of living crisis, and tax hikes, 2025 would seem to have been another tough year for hospitality. But for many businesses, the year was defined less by dramatic highs and lows and more by steady financial pressure. 

As Jane Pendlebury, CEO of HOSPA, puts it: “It’s been a year of limited growth. That’s not to say it hasn’t grown at all but compared to 2023 and 2024 it’s been more restricted, with unpredictable demand and mounting pressures, particularly for smaller businesses.” Yet even with higher payrolls and stubborn inflation in food and utilities, the sector showed remarkable resilience, with many businesses adapting: holding their ground while finding creative ways to improve.

Reflecting on recruitment and job losses in hospitality

Recruitment remained challenging – although less severe than immediately after the pandemic. Brexit and changing workforce expectations continue to shape the labour market, with shortages particularly sharp for skilled roles such as chefs. Rising payroll costs made it harder to sustain previous staffing levels, and some businesses downsized simply to stay viable.

There were positives too. More operators invested in training, professional development, and wellbeing, recognising that supporting their people plays a direct role in retention and performance. Rather than focusing solely on filling vacancies, many began addressing absence, workload pressure and employee support, particularly in larger hotels where turnover and burnout have a clear cost. Ongoing pressure across the hospitality workforce reinforces the need for wellbeing approaches that are practical, affordable and easy to deliver. 

Why sustainability still mattered in 2025

Sustainability may have slipped from the top of the hospitality agenda of priorities, but it never disappeared. Local sourcing remained important, as did the pursuit of accreditations such as B Corp. Strong environmental credentials helped larger brands win corporate contracts and attract guests who judged hotels on social and environmental standards.

“For businesses that have committed properly to sustainability, it doesn’t cost money, it generates money,” says Pendlebury. “If you can’t meet ESG criteria, you simply won’t win certain corporate contracts.”

IHG, for example, has seen more corporate clients prioritise hotels with clear sustainability data through its Green Engage programme. For businesses willing to commit time and resources, sustainability became more of a commercial asset than a cost.

The digital concierge: AI’s role in the guest experience

Technology took another significant step forward. Artificial intelligence and automation began to reduce routine administrative tasks – from occupancy analysis to reporting – freeing teams to focus more on service. Hotels used AI to support bookings, sharpen forecasting, and personalise communications, while customers increasingly embraced self-check in, app-based services, and smarter loyalty programmes. 

Pendlebury notes that the biggest gains so far have been in efficiency rather than headline-grabbing innovation. “AI is taking away a lot of the more boring data entry and data processing, such as the number-crunching and spreadsheets, freeing staff up to focus on the part of hospitality they actually enjoy: dealing with guests.” For many operators, these tools helped absorb some of the pressure created by ongoing staff shortages.

Experiential nights: The rise of immersive hospitality

On the customer side, demand for memorable experiences continued to grow. Gaming nights, immersive performances and alcohol-free socials became more common, alongside a notable rise in wellness-led stays centred on sleep, recovery, fitness, or nutrition. Even hotels without full spa facilities created their own wellbeing moments, responding to guests who wanted something above and beyond accommodation.

2025 in a nutshell: A year of challenges, creative solutions, and staying power

Despite everything, the sector successfully adapted. Many businesses strengthened their processes, invested in technology, and doubled down on staff development. Customers continued to look for experiences that felt meaningful and shareable, and operators found inventive ways to provide them. For a year that offered very little external support from sources beyond the sector itself, 2025 once again showed that hospitality’s resilience remains one of its defining strengths.

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