Scotland’s pubs, bars, and hospitality venues are experiencing their most challenging period in over a decade, according to new figures released by the Scottish Licensed Trade Association (SLTA). The association’s August 2025 Market Insight Survey found that a substantial 70% of hospitality outlets are either in decline or considering closure, with 59% expecting to run at a loss next year – a clear sign of mounting distress throughout the industry.
The survey, which gathered data from more than 350 establishments spanning pubs, bars, restaurants, and hotels, indicates a sector reeling under the effects of rising operational costs and shrinking consumer confidence.
75% of outlets reported a downturn in profitability compared with the previous year, with over half (56%) noting losses greater than 10%. The proportion of venues contemplating closure has more than doubled since the SLTA’s January survey, rising sharply from 6% to 14%.
A combination of factors continues to pressure the industry. Increases in employers’ national insurance contributions, higher national minimum and living wages, and soaring utility costs have made trading conditions “brutal”, with almost one-third of businesses forced to cut staff and reduce opening hours.
National economic pessimism is prevalent: nearly 90% of respondents foresee a further downturn in Scotland’s economy this year.
The SLTA is calling for urgent government action, advocating for a reduction in VAT for the licensed hospitality sector and an overhaul of Scotland’s commercial rates system to align with the rest of the UK. As SLTA managing director Colin Wilkinson put it, “There has never been so much business uncertainty … The only word to describe the current trading conditions is ‘brutal’”.
While the Scottish Government points to existing relief measures and urges the UK Government to reconsider recent tax hikes, industry voices insist that deeper, targeted support is necessary if Scotland’s cherished hospitality sector is to weather these unprecedented challenges.
Key findings included:
- 75% of outlets saw profitability fall year-on-year.
- 59% expect to make a loss in 2025.
- 14% of businesses are actively considering closure.
- 80%+ want policy reform on business rates in the next Scottish election.
The future for Scotland’s hospitality industry hangs in the balance, with many operators warning that without swift, coordinated action from both Holyrood and Westminster, closures and job losses could accelerate in the coming months.
