At this year’s Arena Christmas Event heavyweights from UK Hospitality, The Evolv Collection (previously D&D), Gather + Gather (contract caterers) and RedCat Independent Pubs assembled on the stage at the Mandarin Oriental for a compelling panel discussion. Given the recent budget there was a lot to discuss. Below are my key takeaways, the good, the bad and the ugly…

The Good: Innovation, Investment and Industry Resilience

Despite the challenges, there are genuine bright spots worth celebrating.

RedCat’s remarkable transformation stands out. From a turnaround year in 2024, the business has doubled in size, growing from 14 to 36 hotels under the Coach and Horses brand. They’ve been named the number one large hotel operator – quite a journey for where they started from.

Their secret? A culture of “hospitality from the heart” that’s infectious, comprehensive staff training before customer interaction, and consistent investment in people development. Their new programmes – Ignition for future leaders and Beyond the Plate for service excellence, both show commitment to long-term growth even in difficult times.

The Evolv Collection’s strategic consolidation demonstrates smart operational management. While they reduced suppliers from 500 to 20, they never compromised on quality, letting executive chefs have the final say. This approach saved money through synergies while maintaining standards.

Gather + Gather’s focus on experience reveals opportunities in workplace dining. Claire spoke passionately about moving beyond transactional service to creating end-to-end experiences. “We play a much more vital role in terms of each employee that’s going to work, we have an opportunity to make everyone’s day a little bit better,” she explained. With 95% of her workforce on minimum wage, this approach to joy and purpose matters enormously.

Innovation continues even under pressure. RedCat’s kiosk implementation in Norwich carveries, inspired by QSR technology, achieved 50% customer adoption and drove an uplift in takings, whilst complementing (not replacing) the human service experience.

The Bad: Operational Pressures and Consumer Nervousness

Beyond the political challenges, operators are grappling with day-to-day realities that would test anyone’s resilience.

The panel highlighted how minimum wage increases, National Insurance hikes, and business rates changes are creating a perfect storm.

Whilst consumer nervousness is reflected in spend out of home. Simon’s example was telling, with feedback from one of their GM’s was that Christmas parties “just weren’t spending.”

Claire from Gather + Gather, operating in workplace dining, faces different pressures. With hybrid working here to stay and a five-generation workforce to cater for, the challenge is keeping people engaged when they’re not consistently in the office. “How do you seduce customers to come back continuously time and time again?” she asked. The answer may lie in supplier co creation to drive excitement and experience in workplace dining.

The supply chain squeeze is real too. While partnerships remain strong, operators are caught between rising costs and the inability to pass prices on without affecting volumes.

The Ugly: Budget Fallout and Political Disconnect

Let’s not mince words – the panel pulled no punches when discussing the recent budget’s impact on hospitality.

Alan from UK Hospitality painted a devastating picture, describing the last budget as giving the Government “a slow puncture from which they won’t recover.” The numbers are sobering – hospitality businesses now face 100,000 job losses, with some venues seeing their business rates bills double overnight.

Simon from The Evolv Collection shared a stark example from his portfolio: one business that made £3.3 million EBITDA faces an additional £4.2 million in costs just for “standing still” – effectively wiping out 99% of their profit. His response? Diverting investment overseas for the next three years, where returns are actually possible. Hardly in line with the Government’s drive for growth but completely understandable given the circumstances.

Perhaps most concerning was the consistent theme of political disconnect. As Simon noted with frustration that MPs have often never run a business and don’t understand the real-life impact of budget changes. The panel agreed that the Government, influenced by think tanks like the Resolution Foundation, is treating the economy like a PE firm – backing only the most “productive” sectors (banking, finance and tech) while overlooking hospitality’s unique social value and nationwide reach.

The sector creates jobs for school leavers, provides part-time opportunities for parents, and regenerates high streets, yet it’s systematically excluded from industrial strategies, skills policies, and lending products.

So, What Comes Next?

The panel’s message to government was clear: hospitality deserves investment, not disdain. As Alan powerfully stated: “We need to explain why we should be invested in – the jobs we create, the regeneration we deliver, and the social changes that come from our sector.”

For operators, the focus remains on what they can control: investing in people, maintaining quality, finding efficiencies without compromising the guest experience, and telling their story effectively.

The sector’s rallying cry? Write to your MP, explain the real impact on local high streets and job creation, but channel anger productively. As Alan wisely noted: “Nobody has ever responded to being called an a**hole by agreeing with you.”

Key industry asks for 2026:

  • VAT reduction (currently 20% vs 7-12% across Europe)
  • Business rates reform beyond transitional relief
  • National Insurance contribution relief for hiring young people or those entering from unemployment
  • Recognition of hospitality’s unique social and economic contribution

The panel closed on a note of determined optimism. If money were suddenly available, where would they invest? The answer was unanimous: people. Because ultimately, as Richard from RedCat observed, “in hospitality, it’s less about process and efficiencies, it’s a lot more about people.”

It’s fair to say the sector is facing yet another challenging period, but with leadership like this – honest, strategic, and genuinely passionate about hospitality’s social mission – there’s reason to believe better days lie ahead. Indeed, Simon Stenning’s earlier talk in the day on Reinventing Hospitality showed that with the right proposition aligned to consumer needs operators can succeed despite these challenging times. Read more on Abi’s blog here.

To find out more about Arena and their upcoming events visit https://arena.org.uk/

To find out more about UK Hospitality and the work they do to champion the sector visit https://www.ukhospitality.org.uk/

Susan Wickes
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