2025 is shaping up to be a challenging and redefining year for the UK hospitality and leisure sector in unthinkable ways. Utilising our extensive knowledge of the sector, we have predicted the Top 5 areas that we expect the sector to evolve in.
1. The Experience Economy
→ Consumers are increasingly choosing to spend their money on experiences rather than physical goods, prioritizing meaningful memories and social connections. Between June and September 2024, UK consumers spent an average of £3,332 on experiences—amounting to a total of £178billion—and this trend is continuing to grow (Barclays / Centre for Economics and Business Research, 2024). The upcoming London growth plan highlights the Experience Economy as a key driver of economic growth, particularly in the West End. This has led to a surge in experiential concepts opening not only in the West End but throughout the UK. Nurturing the Experience Economy is central to the future of Central London, especially the West End, which is already a destination for people seeking unique and memorable experiences.
2. Health and Wellbeing
→ The Wellness Industry has emerged as a major force in the global economy, projected to reach $7 billion this year (Global Wellness Institute). This growth is driven by increasing consumer awareness of the connection between lifestyle choices, health, and longevity. As people seek to counteract the stress and sedentary nature of modern life, there is a rising focus on personal wellbeing. This shift has led to the rise of more intense wellness trends—such as HYROX, Ironman competitions, and contrast therapy—and a growing investment of both time and money into building health-focused communities. Notably, many of these communities are forming as alternatives to traditional drinking-based social cultures.
3. Secondary Cities
→ London remains Time Out’s greatest city in the world (Time Out, 2024), but the cost of doing business in the capital has reached an all-time high. The financial strain caused by October’s budget, combined with the end of business rates relief in April, has made operating in London increasingly challenging. As a result, many businesses are now choosing to open their first sites in the UK’s ‘secondary cities’—including Manchester, Birmingham, and Edinburgh—where costs are lower and opportunities are growing. We're also seeing existing operators expand into these cities and launch new concepts there, with Manchester standing out as a particularly popular destination for this trend.
4. Impact of rising cost
→ The hospitality and leisure sector in the UK has been grappling with rising costs over the past few years. Increases in staffing expenses, food inflation, and business rates have all contributed to shrinking profit margins for operators. The upcoming changes introduced in the most recent budget—set to take effect in April—are expected to place even greater financial pressure on the sector, with many businesses warning that their entire profits could be wiped out. This challenging environment has led to increased caution across the industry, fostering a risk-averse mindset. As a result, many operators are focusing their efforts on prime locations and 'secondary cities, 'where perceived stability and growth opportunities are stronger.
5. Sustainability
→ Millennials and Gen Z consumers are increasingly seeking health-conscious and sustainable dining options. They want transparency around where their food is sourced and how it’s grown and produced, putting pressure on restaurant operators to prioritize sustainability. This shift has driven a significant movement towards the ‘farm-to-fork’ model, where restaurants take control of their supply chain by growing their own produce. Notable examples include Higher Ground in Manchester, which sources ingredients from its own Cinderwood Market Garden, and Mayfair’s Farm Shop, which show cases premium produce from Somerset. In response to this growing demand, the Michelin Guide introduced the Green Michelin Star in 2020, recognizing restaurants that champion sustainability and reimagine gastronomy with a lower environmental impact. Operators can also achieve a B-Corp status, a respected certification of ethical and sustainable practices to today’s conscious diners.
