Hospitality Hit Hardest by Inflation Over the Past Decade
The cost of running a business has risen significantly in the past decade, reshaping the business landscape across the UK. However, new research suggests that not all industries have been impacted on the same scale, as the severity of a business’s impact depends on its cost structure.
To understand which industries have faced the greatest pressure, Dojo have analysed ten core cost categories, including business rates, energy, and industry-relevant supplies, between 2015 and 2025, to create the UK Inflation Index, a sector-by-sector breakdown revealing where operating costs have risen fastest, and how business inflation now compares to consumer inflation.
The analysis shows that on average, UK business costs for SMEs have outpaced consumer price growth by 11.75%, creating an “inflation gap”.
How much have operating costs increased for hospitality businesses in the past decade?
| Rank | Hospitality business types | Rent & business rates | Energy | Labour | Insurance | Materials
/supplies |
Technology
/software |
Licensing/
mandatory fees |
Banking/
payment processing |
Transport
/vehicle costs |
Training Costs | TOTAL |
| #1 | Catering companies | 60% | 73% | 39% | 75% | 113% | 125% | 50% | 38% | 57% | 80% | 62% |
| #2 | Hotels | 71% | 64% | 42% | 60% | 65% | 100% | 60% | 83% | 56% | 71% | 52% |
| #3 | Pubs/bars | 50% | 57% | 40% | 80% | 57% | 167% | 50% | 47% | 50% | 60% | 48% |
Dojo’s research found that catering businesses have been hit harder by inflation than any other industry in the index, with overall running costs increasing by 62% in the last decade. Unlike traditional restaurants, caterers must also factor in transportation for every job, making each more expensive to deliver, as logistics costs alone have risen by 57% for catering businesses.
Food prices remain volatile, making supply chains increasingly unpredictable, too. Materials and supplies costs have increased more for caterers than for any other business type, now costing 113% more on average than they did a decade ago.
Of all costs, hotels were the most affected by an 83% rise in payment processing costs, while pubs and bars were most impacted by technology and software, a 167% increase. Over the past decade, hospitality has become increasingly automated, with greater reliance on technology and software across operations.
Charlie Ashworth, Head of Research & Insights at Dojo, says, “While operating costs have risen significantly over the past decade, with the right insight into their cost structure, businesses can be better equipped to respond to these pressures.
“For business owners, the opportunity lies in control and efficiency. With labour, energy, insurance and technology costs all contributing to long-term structural change, understanding where your exposure sits is now a strategic advantage. Reviewing supplier contracts, improving operational efficiency, reducing unnecessary overheads, and optimising payment systems can all help protect margins in a higher-cost environment.
“With increases of this scale, businesses must take a more strategic approach to operations and managing their supplies. Understanding the supply chain is critical, and business owners should really look into how much they pay per item and whether there are more competitive suppliers available without compromising quality. Another option is to investigate how usage can be reduced, or processes improved to minimise waste. In times of sustained inflation, careful supply management can make a meaningful difference to overall profitability.
“Businesses that regularly assess their operating model, adapt pricing strategies where possible, and invest in tools that streamline transactions and reduce friction are often better positioned to absorb cost pressures without compromising service or growth.
“The past decade shows that the cost of running a business has evolved. The next decade will reward those who evolve with it.”