M&A in the UK hospitality sector: October 2025 – March 2026
Deal activity is up, but private equity gives way to trade acquirers
104
deals completed
38%
of deals generated by hotels
15%
PE-backed deals
Our view of the market
UK hospitality M&A activity has continued to build in recent months. The final quarter of 2025 saw 56 deals completing, a 14% increase on the 49 transactions recorded in Q3 2025. Across 2025 as a whole, 215 transactions were completed, representing an 8% increase on the 199 deals recorded in 2024. 2026 started steadily, with 48 deals completed in Q1. Although below the previous quarter’s total, this still points to healthy investor interest in UK hospitality businesses.
After softer activity in the first nine months of 2025, acquirers have shown renewed enthusiasm in pubs and bars over the last six months. Fine and casual dining had a stellar end to 2025, but activity slowed significantly in this space in the first quarter of 2026. Hotel and other leisure deals remained the most popular categories for investors.
For this report, “other leisure” refers to businesses focused on experiences, recreation, and wellbeing that earn revenue primarily from entertainment, participation in activities, or wellness services rather than from food, beverages, or accommodation. These businesses are typically more discretionary and often influenced by seasonality and consumer sentiment. At the same time, they are well positioned to benefit from the ongoing shift in consumer preferences toward spending on experiences rather than physical goods.
Deals by sector
Quarterly deal volume
6 months to March 2026 deals by sector
“The UK hospitality M&A market has seen strategic acquirers playing an increasingly dominant role and a notable shift away from private equity-led transactions in Q1 2026.”
Andrew Williamson, Partner, Corporate Finance.
The UK hotel market
The UK hotel market in 2026 is performing solidly but is no longer experiencing the rapid post-pandemic growth seen in the previous three years. The dominant themes are moderate revenue growth, stable demand, and ongoing cost pressures.
Key trends for 2026
- Occupancy has largely stabilised
Occupancy rates have returned to healthy levels and are no longer the main driver of growth. England’s March 2026 hotel occupancy was approximately 76%, broadly in line with the previous year (i. VisitEngland, 2026). - International tourism continues to support hotel demand
Inbound tourism remains an important growth driver. VisitBritain forecasts continued growth in overseas arrivals during 2026, generating hotel demand, particularly in London and other major gateway cities. However, industry leaders have raised concerns that high aviation taxes and travel costs, and the proposed introduction of local tourism taxes, could limit the UK’s competitiveness versus destinations such as Spain and France. - RevPAR growth remains positive, but modest
Revenue per available room (RevPAR) is still increasing, although at a slower pace than in previous years. Many industry forecasts expect UK hotel RevPAR growth of around 1.5%–2.0% in 2026, with London and regional markets performing similarly. Growth is being driven more by pricing than by large increases in occupancy. - Cost inflation remains the biggest challenge for hotel operators
While revenues are still growing, profitability is under pressure from higher labour costs, rising business rates, and increased financing costs for some operators. Many operators are finding that revenue growth is not translating into equivalent profit growth.
Notable UK hotel deals
In January 2026, MCR Hotels, the third-largest hotel owner-operator in the US, and the owner of London’s BT Tower, completed its £2 billion acquisition of UK-headquartered, NYSE-listed, global hotels and members’ club operator, Soho House. Soho Group has 46 hotels, as well as three The Ned hotels in Doha, London and New York.
i. VisitEngland’s England Occupancy Survey March 2026: https://www.visitbritain.org/research-insights/england-hotel-occupancy-latest
The UK dining market
The UK dining market in 2026 remains resilient but polarised. The stronger performers are those offering clear value and convenience or distinctive premium experience. Operators in the middle ground are facing the greatest pressure. Several industry reports suggest that market growth in 2026 is being driven by higher spend per visit and menu price inflation than by an increase in dining occasions. Participation in eating out has fallen, but consumers are spending more when they choose to go out. Casual dining remains the largest part of the market, but it is arguably the most challenged segment, with ongoing cost pressures from labour, ingredients, business rates and utilities.
Key trends for 2026
- Fewer spontaneous visits
Consumers are becoming more deliberate about restaurant spending. Mid-market casual dining operators have seen softer demand as households cut discretionary spending. - Value is critical
Consumers are increasingly scrutinising menu prices and looking for promotions, set menus and clear value propositions. Operators that can deliver perceived quality without a large price premium are outperforming. - Fine dining proves resilient
As we have reported in our monthly Hospitality Sector Index reports, fine dining has performed better than many people expected given the economic backdrop. Higher-income consumers have proven more resilient to inflation and economic uncertainty, supporting premium restaurant demand. Compared with casual dining, fine dining has generally been more successful in passing cost inflation through to customers.
Notable UK dining deals
In October 2025, London Brasseries Limited, which operates five restaurants across Covent Garden, Soho and Chelsea, was sold to Calveton UK and Breal Capital, owners of a number of businesses in the hospitality sector, including the Evolv Collection (formerly D&D London).
Not surprisingly, given the pressures that the casual dining sector is facing, we have seen a number of well-known names enter administration in the last few months and be bought out in pre-pack deals.
In December 2025, Byron Burger was acquired out of administration by Niyamo Capital, an investment firm led by entrepreneur Akshat Tibrewala.
In January 2026, TGI Fridays UK was acquired for £1 million by Sugarloaf TGIF Operations, a company owned by Sugarloaf, which manages the worldwide TGI Fridays brand. The sale saw the transfer of 1,384 employees, but also the closure of 16 sites and 456 redundancies.
The UK pubs and bars market
The UK pubs and bars sector entered 2026 in a markedly different position from the post-COVID recovery years. Demand remained resilient, but profitability is under pressure. The industry is no longer defined by recovery; it is navigating a structural reset shaped by changing consumer habits, rising operating costs, and a shift toward experience-led hospitality.
Key trends for 2026
- Consumer demand remains surprisingly resilient
Despite ongoing cost-of-living pressures, UK consumers continue to prioritise social experiences. Pubs and bars remain one of the most affordable out-of-home leisure activities. - The rise of experience-led venues
Growth categories include live music, quiz and event-led venues, immersive entertainment, sports viewing and activity bars. The pub is increasingly competing against cinemas, gyms, gaming venues and restaurants – not just other pubs. - Premium wins
Consumers are often willing to pay more for craft beer, premium spirits, cocktails and quality wine. People are drinking less, but drinking better, and with the rise of premium food offers, the distinction between pubs and casual dining restaurants continues to blur.
Notable UK pubs & bar deals
In October 2025, the Evolv Collection announced it had acquired wine bar group Vinoteca and planned to reposition its two London sites as part of its Sartoria group of restaurants.
In March 2026, US beverage and cannabis company, Tilray Brands, bought BrewDog’s UK and Irish assets for £33 million in a pre-pack deal. Tilray acquired the BrewDog brand and intellectual property, its Aberdeenshire brewery and 11 pubs in the UK and Ireland. The deal preserved 733 jobs in the head office, brewing and hospitality divisions, but resulted in the immediate closure of 38 BrewDog bars that were not included in the deal, costing 484 jobs.
Private equity
Private equity firms have long had an interest in hospitality, historically participating in around 25% of sector transactions, either directly or through an existing portfolio company. In Q4 2025, private equity was involved in 27% all the recorded. This was above the long-term average, although below Q3 2025’s all-time high of 33.
The UK PE market was boosted by a series of interest rate cuts in 2025, and the continued high level of activity in the final quarter of the year was underpinned by anticipated further cuts. However, the outbreak of military action in the Middle East put paid to these hopes, at least in the short-term. PE houses, particularly those reliant on leverage, have started to scale back their activity. In Q1 2026, PE was involved in just 15% of all the hospitality transactions we recorded, a significant decrease from 27% in the previous quarter.
Notable PE-backed deals
In November 2025, global experiential events company MARI, which is backed by major PE investors Apollo Global Management, RedBird Capital Partners and the Qatar Investment Authority, acquired the Taste Festivals culinary series for an undisclosed sum from IMG. The food festival brand is headlined by Taste of London.
Percentage of PE-backed deals
Urban Pubs & Bars, the fast-growing hospitality group, backed by private equity firm Davidson Kempner and asset manager Global Mutual, has been busy in recent months. In October 2025 it acquired bar and restaurant group Albion & East, adding four design-led venues to its portfolio. In January 2026, it announced that it was acquiring five premium London venues, including four from Brunning & Price, and one from BrewDog. The group now operates 68 venues across London.
“For business owners, this creates both opportunity and urgency. Well-positioned operators with strong brand identity and, scalable and differentiated concepts, especially experiential hospitality, continue to attract significant interest. At the same time, ongoing cost pressures and margin compression are accelerating consolidation across the sector, particularly in more challenged mid-market segments.”
Andrew Williamson, Partner, Corporate Finance.
Hospitality industry stock performance
Global stock markets recorded significant gains in 2025, before falling sharply in March 2026 following the start of military action in the Middle East. Following the outbreak of hostilities, the markets become highly volatile, with large intraday swings as investors reacted to announcements relating to the expected duration of combat operations and the status of peace negotiations, and the knock-on effect of these on oil prices and supply chains.
The S&P 500 ended Q4 2025 2% up on the quarter, but then fell back by 5% in Q1 2026, ending the six months to March 2026 3% down overall.
UK quoted hospitality stocks told a different story, largely outperforming the wider market during the same period. Of the 12 pub, hotel and restaurant groups we track, only four saw their share prices decrease in the six months to March 2026, with eight in positive territory. When we compare the relative performance of hotels against restaurants and pubs and bars, we find that, on average, hotels performed the worst, with an average increase in value of just 0.1% across the period, while restaurants saw their share prices increase by 4% on average, and pubs and bars experienced an average increase of 11%.
Our star performer during this period was AIM-listed Coppa Collective, formerly known as Various Eateries, following a corporate rebranding in March 2026. The company operates three primary concepts: Coppa Club (all-day clubhouses featuring cafes, workspaces, lounges and dining), Linwood Collection (boutique country pubs and inns with accommodation) and Noci (neighbourhood pasta restaurants). Various Eateries posted a positive set of full year results in February, which were well-received by the market. In March the company announced that it was acquiring several countryside pubs (which would form the basis of its new Linwood Collection) and would be adopting the new group name, Coppa Collective. A positive set of trading results, a sizeable acquisition and a corporate rebrand helped Coppa Collective’s share price rise by 50% across Q4 2025 and Q1 2026.
Our worst performer during this period was Bow Street Group, which operates restaurants under the Wildwood and dim t brands. AIM-listed Bow Street had a torrid 2025, and even a recapitalisation and corporate rebranding (it was formerly known as Tasty) failed to kindle investor interest. In January 2026 the company announced it was in discussions with several potential acquisition targets in the European and Asian cuisine space, but this did not halt the continued share price slide. Bow Street saw its share price down 45% across Q4 2025 and Q1 2026.
Outlook
The outlook for the UK hospitality sector remains cautiously positive, although operators continue to face a challenging trading environment through the rest of 2026. Consumer demand is likely to be supported by easing inflation and improving real wage growth, but discretionary spending remains sensitive to broader economic uncertainty. Businesses will continue to contend with elevated labour costs, higher employer National Insurance contributions, ongoing recruitment pressures and above-historical energy and input costs, all of which are expected to place pressure on margins.
Despite these headwinds, investment in technology, operational efficiency and customer experience is expected to support profitability and competitiveness across the sector.
Growth opportunities are likely to be strongest for operators able to adapt to changing consumer preferences, including demand for value, convenience, sustainability and experiential offerings. Continued cost pressures may also accelerate consolidation across the market, with financially stronger operators and private equity investors seeking acquisition opportunities among businesses facing margin compression or succession challenges.
As a result, M&A activity is expected to remain an important feature of the sector, particularly in fragmented subsectors where scale can deliver meaningful operational and purchasing efficiencies. Overall, while trading conditions are expected to remain mixed, the sector enters the next reporting period on a more stable footing than in previous years, with cautious optimism for gradual growth and improved financial performance.
“Looking ahead, we expect M&A activity to remain robust but more selective. Trophy assets or other businesses that can demonstrate resilience, operational efficiency and a clear value proposition will be best placed to command premium valuations. For others, this market may present an important window to explore strategic options, whether that’s an exit or scaling through acquisition.”
Andrew Williamson, Partner, Corporate Finance.
Methodology and timeline
In compiling our deal tracker we use Pitchbook, an international financial data provider that gives access to comprehensive data on the private and public markets. We analyse every deal with either a UK buyer or UK seller or both. Where the target company is classified as restaurants and bars, other restaurants, hotels and leisure, other leisure, the transaction is entered into the deal tracker.
We published our first annual Hospitality Report in November 2025, reporting on the trends, challenges and opportunities shaping the sector in the UK. Ahead of the 2026 edition of the Hospitality Report, which will be published later this year, we thought it would be useful to provide a six-monthly update, focusing particularly on M&A activity in the sector.
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