Practical Steps for Hotel Owners Facing Financial Pressure

In this article for Hotel Magazine, Jonathan Cooper, our Founder and Director, shares his five practical steps hoteliers can take to manage financial pressure in 2026, from cash flow forecasting to supplier negotiations and early professional advice 

If you missed the original article, catch up below.

The pressures facing hospitality operators in 2026 are unlike anything the sector has seen in years. According to UKHospitality, more than 2,000 hospitality businesses could shut their doors this year, with around six venues a day at risk as business‑rate increases bite and operating costs continue to climb.

Hotels, as well as pubs and restaurants, all feature heavily in these projections, with 963 restaurants, 574 hotels and 540 pubs forecast to close, if no meaningful action is taken.

And while the government announced a 15% discount on business rates for pubs and music venues in January, many hotels and other operators still stand outside the safety net – despite facing significant financial strain. It is no surprise that more businesses are now struggling to maintain cash flow, falling behind on payments or carrying HMRC debts.

Despite industry forecasts showing that hotel occupancy has steadied following post-pandemic recovery, the pressures on UK hotels in 2026 remain particularly acute. Profitability is tightening sharply as wage, energy and financing costs continue to rise. PwC’s latest outlook for the sector notes that revenue growth is now driven more by rate discipline than by volume, with operators struggling to pass further cost increases on to increasingly price-sensitive guests.

Against a tough economic backdrop, taking action early makes all the difference. Directors need a clear picture of their business’s health, whether strong or not, so they can make informed decisions and protect jobs and livelihoods.

Below are some practical steps for hoteliers to take when facing testing financial circumstances. 

Key Practical Steps

1. Early Cashflow Forecasting

Mapping projected income and expenses for three to six months is an effective way for hoteliers to spot any potential pressure points. This allows financial plans to be put in place, ensuring the books remain balanced and all expenses are accounted for.

2. Engaging with Tax and Overhead Obligations

It is vital that HMRC and other creditors are informed if there is any risk of late payments.

Rising costs mean tax liabilities are an easy area for businesses to fall behind on – and one of the most critical.

Early engagement with HMRC avoids enforcement action and shows professionalism, giving businesses more flexibility to manage obligations. Coming forward early makes HMRC much easier to deal with.

3. Review Staffing Models

Reviewing staffing models is one of the most effective ways for hotel owners to manage rising payroll costs without compromising guest experience. Optimising rotas to match demand, while identifying overstaffed shifts and opportunities to rebalance hours, can enable a smaller team to manage operations effectively.

Cross-training employees can also increase efficiency, allowing teams to cover multiple roles during quieter periods. By doing this, hotels can maintain service standards while keeping payroll sustainable during challenging times.

4. Renegotiating with Suppliers

Opening discussions early with landlords and suppliers can help prevent last-minute crises. If hoteliers notice pressure points – whether from rising rent, increased utility costs or growing supplier invoices – it’s essential not to wait until payments become unmanageable.

Proactive conversations signal professionalism and give partners time to explore solutions, such as temporary rent adjustments, revised payment terms, bulk‑buy discounts or extended credit. The earlier these discussions begin, the more flexibility everyone has to reach workable arrangements.

5. Seek Confidential, Professional Advice Early

Seeking confidential, professional advice at the first signs of financial strain can make the difference between stabilising a hotel business and facing avoidable closure. Independent advisors offer a clear, unbiased perspective, helping directors understand their options before problems escalate.

Crucially, all discussions remain private, allowing hoteliers to explore solutions without fear of stigma or damaging relationships. By acting early and seeking expert support, directors can gain clarity, regain control, and give their business the best chance of safeguarding jobs and sustaining long‑term operations.

Act Early to Protect Your Business

With the aforementioned 2,000 closures looming across the sector – driven by rate increases that could see hotels pay, on average, £28,900 more next year and £205,200 over three years – directors cannot risk waiting until financial pressure becomes unbearable.

Taking these practical steps early gives directors the time and space to manage costs, engage with partners, and make informed decisions for the long-term stability of their business.

With hundreds of UK hotels at risk of closure in 2026 if cost pressures continue unchecked, the operators who survive will be the ones who spot financial strain early and act decisively.

In today’s trading environment, resilience is not about absorbing every hit to occupancy, rates or payroll. It’s about knowing when to step back, assess the numbers, and bring in support before issues escalate.

For hoteliers, early action is critical. If any of the practical steps above reveal concerning patterns, they should be addressed as soon as possible – these issues rarely resolve themselves.

Acting promptly gives directors the best chance of stabilising their business, protecting jobs, and securing long‑term viability.