What did 2024 tell us about the year ahead for UK hospitality?

2025 looks set to be another big year for the UK hospitality industry, with many exciting new technological possibilities and multiple pub and restaurant openings, as well as major events such as the Six Nations taking place across the country. 

Changing consumer preferences such as the increase in wellness tourism and the popularity of immersive experiences will no doubt affect the hospitality landscape, as will the economic outlook and the policy decisions coming out of Westminster.

At a point of so much potential for 2025, it’s a good time to reflect on the pivotal moments of 2024. From an increase in smart building technology to grappling with labour shortages and sustainability demands, 2024 was a defining year that tested the industry’s resilience, creativity and adaptability to change. It was a year of both challenges and opportunities that laid the foundation for the coming 12 months.

Here we look at how 2024 unfolded for one of the UK’s most vital sectors —and how its legacy will influence the course of 2025.

Economic challenges

The UK economy started the year with signs of positivity, returning to growth in January after a decline towards the end of 2023. However, the revival was short-lived and the economy did the hospitality industry few favours during the year, with growth staying flat between July and September, and inflation on the rise again towards the year’s end. 

A real body blow was delivered in late October when the Chancellor, Rachel Reeves, announced wholesale changes to employer’s requirements during the Autumn budget, with rises in Employer’s National Insurance and the National Living Wage, in addition to a lowering of the National Insurance threshold.

These changes are likely to bite hardest in April 2025, when many of them come into effect, meaning a need for businesses to find reductions in wage costs that could see staff layoffs or cost-cutting elsewhere. However, with everyone across the industry affected, it could see hospitality businesses finding creative ways to attract customers to increase profits or speeding up the implementation of AI or automated technology to save money.

Innovation

Throughout 2024, the use of new technology took centre stage in addressing industry challenges, finding efficiencies and helping meet sustainability targets. Smart buildings were increasingly employed, particularly in hotels, using analytics to manage heating, lighting and ventilation to lower energy use and costs. Luxury and budget hotels alike integrated smart room technologies, such as app-controlled lighting, temperature and concierge services, to enhance the guest experience while offering operational efficiencies.

Digital Ordering Systems such as QR code menus, initially popularised during the pandemic, remained in use in many places. However, customer pushback showed a preference for physical menus, especially in fine dining. The rise of self-service bars, first appearing in 2023, are an interesting trend stemming from the idea of zero-staff service that could become more popular over the course of the coming year. 

The use of data analytics and menu optimisation have also become increasingly popular, with analytical tools allowing restaurants to identify high-performing dishes and see where customer preferences and cost can align. Their use in reducing waste and allowing for more precise menu planning is being recognised, particularly across restaurant chains with larger inventories where bulk ordering means small changes can have a big cost impact.

Increased use of AI and automation applications, such as chatbots and automated reservation systems, were seen increasingly over the last year. AI-driven chatbots are being used more and more to answer queries, streamline bookings and personalise recommendations, enhancing the guest experience without increasing staff workload. Their use is likely to become prevalent over 2025.

The rise of luxury hospitality

The luxury segment experienced a boom over the last year, with high-profile openings like the Mandarin Oriental in London and the Hyatt Regency in Edinburgh. With international tourism numbers rebounding, the return of wealthy travellers willing to pay premium prices, particularly in the UK’s major cities, means that ultra-luxury hotels are thriving, with room rates starting at around £1,000 per night at the highest end.

Luxury travellers’ demand for unique, high-end experiences further drove innovations in this space. Hotels have invested in immersive technologies, such as augmented reality (AR) tours, and elevated amenities to enhance their exclusivity. Boutique hotels focused on hyper local experiences, such as featuring local artists in rooms or public spaces, as well as a continued focus on wellness or sustainability to attract discerning customers.

The Swift effect

The pronounced impact of major events on UK hospitality was shown starkly by Taylor Swift’s ‘The Eras’ tour during 2024. The 15-date mega tour over the summer was said to have added £1bn to the economy, with a huge impact on hospitality profits wherever the singer was in town.

The Six Nations matches to be played this summer in London, Edinburgh and Cardiff may not be on the same scale, but they will create a welcome boost for local hospitality businesses, while the hugely anticipated Oasis reunion tour will certainly try and match ‘Tay’ for hype and press coverage. Other tours from artists such as Coldplay, Lana Del Ray and Olivia Rodrigo will all add their own contributions to a booming tour sector that will increase hotel, restaurant and bar bookings.

Navigating a changing landscape

During 2024, the UK hospitality industry showcased its ability to adapt and innovate. By embracing technology, focusing on customer satisfaction, and addressing economic and staffing challenges, the sector demonstrated resilience in a volatile market. The integration of digital tools and data-driven strategies allowed businesses to remain competitive and cater to evolving consumer expectations.

Looking ahead, continued investment in technology, sustainability, and staff development will be crucial for success. As the industry evolves, those who prioritise innovation and customer-centric approaches will most likely thrive in an increasingly dynamic environment. Whatever the challenges, there lies an exciting year ahead and one where many hospitality businesses will thrive.