Five years since the pandemic: How hospitality has changed

By Jane Pendlebury, CEO of HOSPA

March 2025 marks five years since the COVID-19 pandemic began, fundamentally altering the hospitality landscape. But what started as a terrible disruption has since evolved into a story of significant challenges and remarkable adaptation across the sector – with the impact still felt half a decade on.

The initial impact

The unexpected arrival of COVID-19 decimated the industry practically overnight. Lockdowns brought hospitality to a standstill, with businesses forced to close their doors and millions of jobs placed at risk. This traumatic experience swept the rug from under virtually every hospitality business, leaving an indelible mark on a sector that forms a vital pillar in the UK economy.

In 2024 alone, 4,078 hospitality venues closed across the UK – averaging 11 closures a day, according to the latest Hospitality Market Monitor. The pub sector has been particularly hard hit, with 412 pubs shutting their doors in 2024, bringing the total number of pubs in England and Wales below 39,000 for the first time on record. Nearly one-third of all nightclubs have closed since 2020, driven by rising costs, shifting consumer habits and restrictive licensing policies.

A shift in operations

For those businesses that survived, the pandemic forced a complete rethinking of operations. Many practices introduced out of necessity – contactless payments, digital check-ins and app-based ordering – have now become permanent fixtures. QR codes, once seen as a gimmick, are now widely used for menus, feedback and payments.

The financial strain of this period has been exacerbated by the need to repay Covid loans, coupled with soaring costs in food, utilities and staffing. Supply chain disruptions have further compounded these issues, making it difficult for businesses to operate profitably. Many establishments have had to reduce their operating hours, closing earlier in the week to manage costs.

A changing workforce

The hospitality workforce has undergone a significant transformation. Brexit had already reduced the availability of skilled workers and the uncertainty of repeated lockdowns saw many leave the industry altogether. Recruiting for specialist roles, particularly chefs, remains a challenge.

For those still in the sector, the demand for flexible working has grown, with hybrid roles becoming more common in certain areas. While front-facing roles still require staff to be present on-site, office-based hospitality jobs are more likely to allow remote working. Employers have embraced more part-time and job-sharing opportunities, making the industry more appealing to those seeking work-life balance.

However, the sector continues to be plagued by uncertainty and a lack of stability. Zero-hour contracts, while offering flexibility, do not provide the security needed for major life decisions such as securing a mortgage. Many potential workers have opted for more stable employment opportunities, such as Amazon and supermarket delivery services, where they have more predictable schedules.

The rise of technology

The pandemic accelerated the uptake of technology, with AI and automation now playing a significant role in operations. Labour scheduling, fraud detection and personalised guest experiences have all benefited from advances in tech. Chatbots now handle booking enquiries, while AI-driven analytics help businesses refine their offerings.

Despite the benefits, technology is not a universal fix. Some guests appreciate the convenience of digital check-ins, while others prefer a traditional welcome. Striking the right balance between automation and personal service is key, ensuring that guests have a choice in how they interact with a venue.

Larger operators are leading the way in tech adoption, but smaller businesses often struggle with the costs involved. That said, more affordable solutions are emerging, making it easier for independents to remain competitive.

The financial picture

Hospitality's financial recovery has been mixed. After the pandemic, there was an initial surge in demand as consumers returned to restaurants and hotels. This boost helped many businesses recoup some losses, but it was short-lived as economic realities set in.

Rising costs continue to put pressure on margins. Labour and supply chain costs have all increased, while consumer confidence remains fragile. Hotel data suggests that RevPAR (revenue per available room) has returned to near pre-pandemic levels in key markets, but economic uncertainty lingers.

The ongoing impact of high rents, inflation, energy prices and interest rates has made recovery an uphill battle. Business rates and the repayment of Covid loans are significant financial burdens. The initial relief provided by government support schemes has waned, leaving businesses to navigate a challenging economic landscape.

Consumer Habits

The lockdowns brought about a significant shift in consumer habits. While some forward-thinking establishments pivoted to offer takeaway services, the broader trend saw consumers becoming accustomed to staying at home. Many people discovered or rediscovered the joy of cooking, leading to a decline in dining out.

This shift has had lasting effects, even as restrictions eased. The savings accumulated during the pandemic have largely been depleted, with current economic uncertainties prompting consumers to exercise more caution with their spending.

On a more positive note, conferences and events have seen strong growth. With remote working now commonplace, many businesses are using hospitality venues for team-building and in-person meetings. Leisure travellers are favouring shorter, experience-driven breaks, with destinations such as London and Manchester benefiting from international interest.

What lies ahead

Over the next five years, technology will continue to shape hospitality, particularly in how businesses personalise guest experiences. AI will be used more widely, from virtual concierges to tailored marketing. The challenge will be integrating these advances in a way that enhances, rather than detracts from, the human side of hospitality.

Sustainability will remain a priority, even if the wider political landscape shifts. At the same time, economic pressures will force operators to find creative ways to manage costs while maintaining service quality.

If the past five years have shown anything, it's that hospitality is a sector caught between profound challenges and remarkable resilience. The pandemic has accelerated the closure of countless establishments while also pushing survivors to innovate, rethink their operations and embrace change in ways that might otherwise have taken decades.

The road to recovery may be longer and harder than hoped for, but the industry has always shown remarkable resilience and is blessed with some astonishing innovators. With the right support and continued adaptation, the hospitality sector can rebuild and potentially scale new heights in the future – even if the landscape looks markedly different from its pre-pandemic form.

Jane Pendlebury is the CEO of HOSPA – the Hospitality Professionals Association. For more information, visit www.hospa.org.