Performance during 2026W7 (Week ending 02/15/2026) 

Total Restaurant Cohort:

SSS: +1.2% YoY | +19.3% vs prior week 
Indicates a strong WoW rebound across the market. 

Fine Dining: 

SSS: +4.4% YoY | +26.3% vs prior week 
Outperformed the broader market on both YoY and WoW metrics. 

Upscale Casual: 

SSS: –2.1% YoY | +14.3% vs prior week 
Still below last year but showing meaningful week‑over‑week recovery. 

PERFORMANCE DRIVERS

Higher Sales per Head (SPH) is the primary driver of positive sales momentum. SPH increases helped offset the traffic softness. 
Total Cohort: SPH +1.5% YoY | Avg SPH £54.2 
Fine Dining: SPH +5.1% YoY | Avg SPH £104.2 
Upscale Casual: SPH +5.2% YoY | Avg SPH £41.2 

The week reflects stronger spend per guest despite softness in cover volumes. 

OBSERVATIONS 

Over the trailing 13‑week period (2025W41 to 2026W1), Our Fine Dining portfolio experienced a SSS decline of ~ (1.0%) versus the prior year, driven primarily by a ~ (1.7%) drop in traffic. 

Consumers have been scaling back on dining‑out occasions – particularly higher‑priced, family‑oriented meals. Notably, 46% reported plans to reduce how often they dine out, which has directly affected hotel family‑meal traffic and event‑catering volumes. ⁽¹⁾ This shift in consumer behavior has contributed to the softer performance in both Fine Dining and Family Dining. 

(1) Leisure and hospitality industry outlook 2025 | RSM UK

The struggle is not unique to D.C., though the city often feels like a pressure cooker for these issues. On a national level, the hospitality industry is grappling with a shift in consumer behavior driven by a cooling economy. People are tightening their belts. High interest rates and the cumulative effect of years of inflation have made dining out a luxury that many are starting to trim from their monthly budgets. When the cost of groceries remains high, the premium of a restaurant meal becomes much harder for the average person to justify. 

In Washington, these general economic headwinds are amplified by local policy. The steady phase-out of the tip credit under Initiative 82 has forced a radical restructuring of how businesses handle their payroll. For a mid-priced restaurant, an overnight spike in labor costs can be the difference between breaking even and falling into the red. Owners are caught in a difficult spot where they must either raise menu prices, which risks alienating a cash-strapped public, or cut staff. The reality is grim, as a recent RAMW survey found that 44 percent of full-service casual restaurant owners feared they would be forced to close their doors by the end of 2025. 

The “vanishing middle” is perhaps the most visible trend of this period. While high-end establishments can often rely on a clientele that is less sensitive to economic swings, the casual, full-service spots are being squeezed from both sides. They are too expensive for the quick-bite crowd but not exclusive enough to be a “special occasion” destination. Data suggests that 76 percent of these mid-priced spots saw a significant decline in foot traffic this year, a clear sign that the casual diner is staying home. 

Beyond the internal costs, external factors like a 43-day government shutdown and a dip in tourism have robbed the city of the consistent volume it needs to thrive. When the offices in a downtown corridor are empty and the tourists are staying home to save money, even the most beloved institutions struggle. Many operators reported that their sales were down by as much as 20 percent compared to the previous year, leaving little room for error.

Looking into 2026, the industry is entering a period of forced evolution. To stay alive, many businesses are moving away from the traditional full-service model in favor of smaller spaces and counter service. It is a pragmatic response to a brutal economic climate. The coming year will likely be defined by this search for a more sustainable way to operate in a world where the old margins simply do not exist anymore. 

The £1.4 Billion Wage Hike: Labour Costs Reach a Critical Point

The single largest and most immediate financial hit for restaurants comes from the mandatory increase in the National Minimum Wage (NMW) and National Living Wage (NLW). The headline measure is the rise in the National Living Wage for over-21s to £12.71 per hour from April 2026, one of the steepest increases the sector has faced. This increase, while a boost for employees, represents a major spike in operating expenses for businesses where labour often accounts for over 40% of costs.

Industry body estimates suggest the NLW increase, combined with higher employer National Insurance contributions and other structural wage costs, will add around £1.4 billion of extra cost across the hospitality sector. Operators are also facing a dilemma as frozen income tax thresholds continue to push more staff into higher tax brackets, meaning employees may not feel significantly richer despite the pay rise.

This simultaneous rise in wage costs and a lack of substantial relief elsewhere means restaurants are being forced to search aggressively for efficiencies, often through technology adoption, menu price increases, and cutting labour hours.

Business Rate Changes

The budget did address the long-standing industry complaint regarding business rates, but the actual benefit to many restaurants is expected to be minimal, if not negative.

The government confirmed it would permanently implement lower business rate multipliers for Retail, Hospitality, and Leisure (RHL) properties valued under £500,000 from April 2026. This move provides certainty by replacing previously temporary, year-to-year relief measures. 

This permanent reduction is being introduced alongside the 2026 property revaluation, where rateable values for hospitality sites are expected to rise. Early assessments indicate increases typically between 10–15% for restaurants and cafés, though some regions may see higher uplifts. Because the lower multiplier is less generous than the previous temporary reliefs, the combined effect of the revaluation and the new multiplier is expected to result in higher overall bills for many independent and mid-sized restaurants, in some cases exceeding 30–40%. 

Consumer Changes

For restaurants, particularly those catering to mid-to-high-end diners, changes to personal and investment-related taxation threaten to constrain consumer spending. 

• Fiscal Drag: The decision to freeze Income Tax and National Insurance thresholds until 2030/31 will pull more middle and higher-income workers into paying higher rates, reducing their genuine disposable income. This is critical for the restaurant sector, as these customers drive essential midweek and high-value dining spend.
• Wealth Taxation: Reductions in allowances for dividends, savings, and rental income from 2026/2027 will reduce the spending power of affluent customers. While the increases are not a flat 2% across all categories, the overall effect is the same as less disposable income at the higher end of the market.
  

The planned removal of the two-child benefit cap from April 2026 will raise incomes for many lower-earning households. While the overall effect on the sector is uncertain, this may offer a modest boost to casual dining and family-oriented venues. 

Other Challenges for Operators

Beyond the core costs of labour and property, operators will need to contend with administrative and tax changes: 

• Alcohol Duty: Wet-led venues and restaurants will feel pressure from the confirmation that alcohol duty will rise in line with inflation from February 2026.
• Digital Compliance: Businesses will need to prepare for mandatory e-invoicing, which will roll out in phases from 2026–2029, and for the commencement of Making Tax Digital for Income Tax from April 2026 for self-employed individuals and landlords.
• Tourist tax: Regional mayors may be granted the power to introduce a levy on overnight stays, although this has not yet been finalised.
• Employee contract reforms: The government is reviewing zero-hours contract arrangements, but no confirmed ban or restrictions have been announced at this stage.

The budget marks a moment when the hospitality sector receives targeted relief that falls short of offsetting significant cost hikes. With costs rising structurally and customer budgets constrained by fiscal drag, restaurant margins are set to remain under intense pressure, demanding greater resilience and a relentless focus on operational efficiency and profitability.

A Paperchase Senior Accountant says “the budget offers some stability, but rising wage costs, tighter customer spending and the 2026 business-rates revaluation mean most hospitality businesses will continue to face pressure on margins. Further changes to personal tax, duty increases, and new compliance requirements add to the strain, making careful planning and operational efficiency more important than ever.” At Paperchase, we’re ready to support clients with clear, practical guidance. If you’d like to discuss how these changes may affect your business, we’re here to help.

Currently, the economy is showing a familiar pattern. President Trump’s announcement of international tariffs in April 2025 sent an already unstable market falling. This economic downturn has led to reduced consumer spending and uncertainty over the economic future with many restauranteurs seeking to understand the impact of these fluctuations on their revenue. Paperchase’s financial specialists in the restaurant and bar industry analyzed same store data across all restaurant sectors to detail the correlation between equity-market crashes and the food and beverage business.

2023 Market Correction vs 2025 Market Drop

Although the tariffs are not expected to directly impact restaurant costs as much as other sectors, the runoff effects of the downturn have affected the revenue of hospitality businesses across the industry.

In reaction to the tariff announcement, the Dow Jones Industrial Average dropped over 4,000 points over two days in April 2025, marking a 9.48% decline. The S&P 500 and Nasdaq experienced composite declines with a combined 11% loss. Paperchase’s team compared data from the April 2025 crash to the 2023 Market Correction, identifying a historic correlation on hospitality revenue in times of economic crisis.

Between July 31st and October 27th, 2023, the stock index fell from 4,588 to 4,117, a -10.3% decline over 88 trading days. Similarly in 2025, from February 19th to March 13th the stock index retraced −10.0% from its February high, entering correction territory as of March 13, 2025. This adjustment came in just a few weeks before the crash on April 3rd, resulting in the S&P 500 dropping 275 points, or −4.85%, to 5,395.

Source: Paperchase

US Markets

The stock market fluctuates on a regular basis, but major economic developments can send it spiraling. Paperchase reviewed previous economic slowdowns in addition to this most recent stock market downturn to identify the historic and recent effects of the trading economy on revenues across segments including Fast Casual, Contemporary Casual, and Fine Dining.

2025 Market Drop

After the tariffs were announced, fast-casual and quick-service restaurants saw their sales increase by about 2.7% on average in February and March compared to 2024. Mirroring the trend from economic downturns in previous years, higher-end restaurants held up better than in prior economic downturns. While the impact of the downturn on restaurant revenue can be seen as minimal, there was a decrease in traffic across all segments. This drop in traffic is likely due to the ongoing uncertainty about trade policies and the impact of the new tariffs. In 2025, overall revenue remains stable despite a decline in customer traffic. This equilibrium has been maintained by an increase in average transaction value and menu pricing. While revenue reporting was consistent with the prior period, the volume of individual transactions decreased. Notably, Fine Dining establishments experienced stagnant sales rates.

In a survey on consumer sentiment by the University of Michigan, 60% of respondents mentioned tariffs unprompted, reflecting broad worries that tariff spikes will keep prices elevated and disrupt supply chains. The survey, which compared March and April 2025 to March 2024, showed a –32.4% drop in consumer sentiment over the last year.

Same Store Sales Across Segments

Source: Paperchase

Source: Paperchase

Source: Paperchase

News from Reuters echoed these feelings, with consumers saying for the fourth month in a row that they were worried about how the tariffs would hurt the economy. In the same survey, respondents also pointed to rising prices as another reason they had less money to spend. The survey concluded that many consumers expected inflation to get worse over the next year, increasing from a 5.0% expectation to 6.5%. This was linked to a negative outlook on the possibility of wage increases in 2025. Overall, people have significantly cut back on spending in pretty much every part of the economy.

The 2023 Correction

The S&P 500 dropped by about 10% between late summer and early fall of 2023, contributing to a significant slowdown in consumer spending across all types of businesses. Economic uncertainty continued to be felt with restaurant revenue falling through summer 2024. Hits on the stock market can result in consumer backlash and decreased spending, representing a clear link between what’s happening in the stock market and how restaurants and bars are performing. Paperchase’s analysis of sales at the same stores during the first half of 2024 reflects this trend.

Comparing winter 2024 to summer 2024, Paperchase’s group of Fine Dining and Casual Dining businesses saw major declines of about 8.0% and 11.9%. In contrast, the Fast Casual segment experienced growth of around 4.4% during this period, signaling a customer push towards affordable options. This data lines up with trends we’ve seen since the pandemic. For the past two years, Fast Casual has been the strongest performing category in our cohort, mirroring public market data for fast-casual businesses.

UK Markets

When President Donald Trump announced tariffs in April 2025, it had a knockdown effect on global economies. Many of Paperchase’s customers in the UK saw fluctuation in an economy that has been shrinking for four quarters in a row. Our experts compared information from both 2023 and 2025 to see how the UK restaurant market tends to react when the international economy is under pressure.

2025 Stock Market Decline

Between February 19th and March 13th, 2025, the 10% drop in the stock market signaled that respondents in the UK were becoming more cautious about spending in restaurants. Unlike the market adjustment in 2023, Fine Dining saw the most significant decrease this time, while Fast Casual performed better than other segments.

Sales at the same Fine Dining locations fell by 4.7%, while Casual Dining showed a steady but small growth of 0.1%. In contrast, Paperchase’s Fast Casual clients in the UK did much better than expected, with a strong growth of 13.6%. This was likely driven by rapid improvements in technology such as online ordering as customers favor good value and convivence post-pandemic.

2023 Market Adjustment

While the UK market didn’t see as dramatic a downturn in 2023 as other regions, there was still enough of an impact to cause sales to decrease across different types of restaurants. When we looked at our Paperchase UK customers in early 2024, the average sales decreased slightly by 0.1% compared to the year before. Fine Dining and Fast Casual both saw drops of around 2.5-2.6%, while Casual Dining restaurants experienced a modest increase of 2.4%.

During times of economic uncertainty, consumers in the UK are historically keen on affordable options that still offer good value. The “Casual” category, which includes cafes and pubs with lower average spending, saw their sales growth at the same stores fall to single digits in early 2024. Fine Dining in major cities like London has historically remained relatively stable, even when there’s global economic pressure.

Consumer Sentiments

Sudden equity-market downturns coincide significantly with decreases in restaurant traffic and spending. Some of the immediate effects include a rising sensitivity to dining out in conjunction with these market swings. An economy in flux fosters fear among consumers and economic uncertainty siphons revenue from restaurants already holding on by a thread in a competitive market.

Spending responsiveness has also given rise to higher credit card debt among consumers. According to a report by ABC, American household debt (credit cards, loans, and mortgages), hit a record high of $18.04 trillion in February 2025. With this rise, delinquencies such as missed payments also increased – contributing to less spending overall. This reactionary approach to the economy is tied to Renaissance Macro Research report that showed restaurant and bar sales decreasing by 1.54% in February 2025 – right around the release of the household debt report. This market volatility rippled through SSS to contribute to a three-month decline of 8.5%. The correlation between rising debt and equity-market downturns is telling, specifically, of dwindling consumer confidence in the market.

General Outlook

Despite some segments thriving over others during this period, the outlook of the food and beverage industry remains unclear. Paperchase’s restaurant finance analysts predict flat forecasts moving forward until the market corrects itself. To combat this, operators have shifted their focus to customer retention and high value offerings. This includes decreasing menu prices through discounts and loyalty program offerings. Overall, the industry has adopted a keen focus on technology, especially fostered by an increase in online ordering from younger generations.

Outside of direct influences on the industry, capital spending has been affected by the 2025 tariffs. Restaurant owners have seen price increases on goods like equipment, construction, and beverage vendors. This has added strain and contributed to fluctuations in revenue felt by business operators.

Overall Economic Forecast

The data compiled and analyzed by Paperchase’s hospitality finance teams paints a clear picture of the sensitive relationship between equity market downturns and the food and beverage industry. The recent market volatility in early April 2025, triggered by global tariffs, echoes historical trends, albeit with nuanced segment-specific impacts. While the 2023 market correction saw a broad slowdown across all restaurant types in both the US and the UK, the 2025 drop revealed a more pronounced shift towards value-driven options. Fast casual and QSR segments demonstrated greater resilience, even growth in the UK, while fine dining experienced more significant declines.

The overall takeaway shows the profound influence of consumer sentiment and spending power, both directly affected by market fluctuations and macroeconomic factors like tariffs and rising household debt. The near quadrupling of spending responsiveness to stock market changes over the past two decades highlights the increased sensitivity of consumers to economic uncertainty. The added burden of increased capital spending due to tariffs further complicates the industry’s outlook, suggesting a period of flat growth until market stability returns. These findings emphasize the need for hospitality businesses to remain agile and adapt their strategies in response to the ever-evolving economic landscape and its direct impact on consumer behavior.

Universal tariffs implemented since January are not just headline-grabbing discussions. They are significantly impacting the cost of doing business, hitting the hospitality industry where it counts, and putting long-term financial stability at risk.

Operators now face a new balancing act: protecting margins while preserving the guest experience, all in the face of rising costs, supply chain volatility, and increased competition for limited domestic resources.

What Are Tariffs, and Why Do They Matter in 2025?

Tariffs are taxes placed on imported goods. When a U.S. business imports a product from another country, a tax is assessed at the border. That cost is passed along to importers, distributors, and ultimately, the businesses that buy the imported products.

Let’s say a restaurant imports an espresso machine from Europe for $5,000. If there’s a 10% tariff on specific imported machinery, the new cost becomes $5,500. That extra $500 doesn’t go back to the manufacturer overseas. It goes to the U.S. government.

In early 2025, the United States implemented a universal 10% tariff on a wide range of imported goods, including many items used in the restaurant and hospitality industries. The goal is to encourage more domestic production, but the effect is increased costs for businesses that rely on global supply chains.

Rising Costs in Hospitality and Foodservice

In 2025, a comprehensive new tariff policy is transforming the industry’s economics from the ground up. The ripple effect is real. With tariffs impacting the cost of importing everything from kitchen equipment to wine selections that support the entire concept, owners and operators are forced to reconsider their strategies.

And the effects extend beyond the US border. In the UK, equipment manufacturers expect to see a negative impact on products that are exported to the US. Iain Munro, secretary general of The European Federation of Catering Equipment Manufacturers (EFCEM), said “The US tariffs are a key area of concern and discussion within the EFCEM membership. Several major brands that have established themselves in the US market in recent years will undoubtedly feel the impact, particularly in terms of future growth plans.”¹

Both the UK and the EU depend on imports from the US for construction materials. As the universal tariffs drive demand for domestic product in the US, the threat of rising costs and supply disruption for US exports loom heavy on the nations that depend on their products. While the world observes the global supply chain impact, some countries have responded with reciprocal tariffs. Though the UK and EU regions have not implemented reciprocal tariffs as of publication, they will undoubtedly have to source secondary suppliers and adjust budgets to account for increased costs.

Key Foodservice Cost Increases

• Coffee
• Seafood & Specialty Produce
• Alcohol & Wine
• Steel & Construction Materials
  https://www.fcsi.org/foodservice-consultant/worldwide/tariffs-unsettle-the-industry/
• Overall Food Costs

The list may feel small in isolation, but across dozens of SKUs and thousands of covers, the math compounds quickly

Coffee: Imported Beans Hit with Rising Costs

Coffee, with 99% of the U.S. supply imported, is one of the most visibly impacted commodities in 2025. Specialty coffee roasters, particularly those sourcing beans from Central and South America, have reported price increases of 15–20% due to country-specific tariffs.

For example, an independent roaster in Seattle shared that their green bean cost per pound increased from $2.85 to $3.45 in the span of 45 days, forcing them to either raise prices or absorb the cost 2 . Nationally, chains like Blue Bottle and Stumptown are re-evaluating wholesale contracts and retooling single-origin offerings to mitigate import exposure.

Seafood & Specialty Produce: Imports Disrupted, Menus Adjusted

Shellfish imports from Southeast Asia and Europe—specifically prawns, mussels, and scallops—have taken a brutal hit. Several high-end seafood restaurants in the Northeast and

https://theaviarycoffeeshop.com/blogs/all-things-coffee-with-the-aviary/the-rising-cost-of-green-coffee-beans

Pacific Northwest has temporarily removed imported shellfish from their menus, citing both cost and availability issues.

Hospitality groups operating seafood-focused restaurants note tariff-related price hikes and delays led them to replace French and Irish oysters with local East Coast varieties, which have also risen in price due to increased demand.

At the same time, fresh produce importers have reported a 4% rise in costs across high-demand categories like avocados, berries, and citrus fruits from non-exempt regions, affecting both back-of-house purchasing and seasonal limited-time offers.

Wine & Spirits: Tariffs Tighten the Pour

Imported wine and spirits face a direct hit in 2025. The cost of key wine selections from France and other European producers has jumped more than 10%. For operators, this isn’t just about numbers; it’s about identity.

“The new tariffs are squeezing the soul out of our wine list,” says Shanna Nasiri, owner of With Others in NYC, in an interview with the New York Post. With the sudden cost spikes of premium imports, restaurants are trimming cellar selections, reworking pairings, and leaning harder on domestic labels—all while trying to maintain the guest experience intact.

The suggested 20-30, and even 200% additional tariff on imported wines would surely damage the worldwide collaboration that is the very inspiration for the United States wine industry. Thankfully, the anxiously anticipated higher tariffs set for April 2nd are still on hold as of May.

Construction Costs on the Rise

Tariffs in 2025 hit beyond the kitchen, impacting the cost of steel, aluminum, and other essential construction materials. For restaurant operators planning new builds or renovations, the price of imported stainless steel equipment, HVAC components, and structural materials has climbed sharply.

These unexpected increases are putting pressure on capex budgets, causing some of our clients to delay projects, renegotiate contracts, or explore leasing options as a way to preserve cash and reduce exposure.

Overall Food Cost Surge: +2.8% Industry-Wide

According to industry analysts such as the National Restaurant Association, hospitality operators are experiencing a 2.8% year-over-year increase in overall food costs, with produce costs rising by over 4%³

While this might seem modest at face value, it has a compounding effect on already tight prime cost ratios, especially for multi-unit operators. For a fast-casual restaurant group with a 30%

food cost baseline, that 2.8% lift translates to a significant dent in profitability if not countered through price adjustments, menu redesign, or sourcing strategy.

Supply Chain Disruption

Tariffs aren’t just inflating costs—they’re also disrupting availability. Operators are grappling with product instability, and the domestic market is carrying a significant burden from unanticipated increases in demand.

Restaurants that rely on imported specialty items—such as European cheeses, rare spices, or single-origin chocolates—are now facing inconsistent supply and unpredictable pricing. As more operators pivot to U.S.-sourced goods, increased demand is pushing up prices for domestic ingredients, further shrinking the cost advantage of local sourcing.

This one-two punch leaves operators stuck between reformulating menus and absorbing unpredictable increases, all while trying to maintain a seamless front-of-house experience.

The Bigger Picture: A Season of Strategic Discipline

Tariffs are just one part of a larger story in 2025: a tightening economy, rising labor costs, and shifting consumer expectations. For hospitality operators, this isn’t a time to panic—it’s a time to lead with discipline, agility, and data-backed financial strategy.

At Paperchase, we’re working directly with restaurant groups, hoteliers, and multi-unit operators to:

• Model the financial impact of tariff-driven cost changes
• Recalculate food and labor cost benchmarks
• Strategically update menu pricing and vendor contracts
• Plan for cash flow volatility and tax implications

Paperchase can optimize your hospitality operation with day-to-day bookkeeping and accounting service. Learn how here.

How Operators Are Responding

Forced to make major pivots for the second time in five years, operators aren’t waiting to take action. Our team is providing financial support for strategic moves like:

Menu Price Adjustments

Rather than passing the full cost on to consumers, restaurants are partially absorbing price increases and only adjusting pricing modestly while tightening internal cost controls.

Ingredient Substitution & Menu Engineering

Operators are reworking menus to emphasize flexible, high-margin ingredients that can be sourced domestically. In some cases, they’re simplifying offerings to reduce complexity and purchasing risk.

Capital Expenditure Delays

With kitchen equipment now subject to higher tariffs, operators are delaying upgrades or
leasing equipment to reduce immediate capital exposure.

Does Relief Exist?

The good news? There are still meaningful opportunities for operators to protect margins and maintain menu integrity. Restaurant and hospitality operators can strategically shift sourcing to include domestic suppliers, but thanks to the United States-Mexico-Canada Agreement (USMCA), a wide range of goods remain exempt from the 2025 universal tariff.

Below is a breakdown of key categories that remain tariff-free under USMCA when origin requirements are met:

Proteins & Meats

• Beef (fresh, chilled, or frozen)
• Pork and pork products
• Poultry products
• Processed meats (e.g., sausages, bacon, deli cuts)

Fresh Produce

• Avocados
• Tomatoes
• Berries (e.g., strawberries, raspberries, blueberries)
• Leafy greens (e.g., romaine, spinach)
• Bell peppers and chili peppers

Dairy & Dairy Products

• Milk and cream (within quotas)
• Certain cheeses (e.g., queso fresco, panela, cheddar from Canada)
• Yogurts and cultured dairy (with quota limits and rules of origin met)

Dry Goods & Ingredients

• Dried beans and legumes
• Cornmeal and tortillas (from Mexico)
• Rice and certain grains
• Spices and herbs (if grown and processed within USMCA countries)

Bakery & Prepared Goods

• Baked goods (tortillas, bread, pastries made in Canada/Mexico)
• Pre-prepared dough and mixes (origin-compliant)

Beverages

• Fruit juices and flavored waters
• Soft drinks bottled and produced in Canada/Mexico
• Beer and tequila (not subject to the 10% general tariff if produced locally and origin rules are met)

Food-Grade Packaging & Inputs

• Packaging materials (e.g., paperboard cartons, aluminum cans) manufactured in Canada/Mexico
• Biodegradable food containers (must originate entirely in USMCA countries)

Industry Advocacy

The National Restaurant Association has intensified its lobbying efforts to exempt key food and beverage categories from the tariff list, acknowledging that the hospitality sector bears a disproportionate burden under the new rules.

Final Thought: Clarity in a Complex Landscape

The 2025 tariffs feel like yet another external strain on the hospitality industry. But if there’s one thing we’ve learned in a post-pandemic landscape, it’s that operators are innovative and resilient. Owners who invest in financial visibility, operational efficiency, and strategic sourcing will weather this storm, use it to differentiate themselves from their competition, and lead to success.

Let’s plan your tariff strategy. Whether it’s forecasting cost changes, adjusting pricing, or navigating supplier contracts, Paperchase helps you stay profitable in uncertain times. Contact us today to explore how we can help strengthen your financial strategy.

We offer tailored support to help you adapt without compromising your guest experience.

A global epicenter for innovation, luxury, and growth, Dubai has seen a 9 percent increase in global visitors in 2024. On its way to becoming the world’s most-visited city in 2025, the emirate continues to attract leading hospitality brands –– from IHG Hotels & Resorts to acclaimed restaurants like Nobu, Carobone, and Zuma’s plans for a Dubai Beachhouse. From a small fishing community to a business and tourism powerhouse, Dubai today has over 150,000 hotel rooms, with its airport welcoming a record breaking 44.9 million passengers in the first half of 2024. This meteoric growth solidifies its position as a magnet for the world’s top hotel brands and restaurants.

Besides Dubai, the Middle East region as a whole is witnessing a hospitality renaissance. The tourism sector in the region is expected to reach over $400 billion by 2032, driven by GCC countries, with the region anticipating a $7 billion hospitality boom in 2026. Strategic policies, including Saudi Arabia’s Vision 2030 and enormous investment in tourism, are reimagining the region as a world hotspot. The region’s highest revenue and profit margins in the hospitality industry mean that Middle Eastern hospitality is not only expanding-luxury itself is being remade.  

While Dubai is brimming with potential, breaking into its fast-paced market takes more than aspiration –– it requires experts who are familiar with the region, its policies, and financial landscape. Paperchase, has worked with key players in UAE’s market, and has assisted in leading hotels and restaurants get rooted in the city’s culture. We’ve been the primary bookkeepers and accountants to brands like Amazonico and Hurricane’s Grill, driving their success from day one. 

A Playground for Global Hospitality Giants 

Dubai’s geographical location at the intersection of Europe, Asia, and Africa has long positioned it as a global trading center. But over the past few years, it’s become a desirable region for the hospitality sector, with some of the world’s most famous hotel chains and restaurant groups opening up shop. 

The city welcomed 17 million international visitors in 2023, cementing its place as one of the top tourist destinations globally. Naturally, where tourists go, hotels and restaurants follow. Dubai’s luxury hospitality market is booming, with brands eager to tap into its affluent residents and high-spending visitors. 

The statistics are telling-Dubai is home to over 800 hotels with over 150,000 rooms. The restaurant industry reflects this boom, while the UAE QSR market is expected to grow by 6.55 million USD IN 2025, and is expected to reach 16.38 billion USD by 2030 with a rapidly moving CAGR of 20.12% during the forecast period (2025-2030). 

Why Dubai? The Key Ingredients to Success 

1. A Diverse Consumer Base with a Taste for Luxury 

Dubai has more than 200 nationalities, making it a melting pot of cultures and tastes. There is everything from Michelin-starred fine dining to local Emirati cuisine, but what sets it apart is the appetite of its consumers for luxury and exclusivity. 

The city’s high-net-worth residents and high-end visitors are always looking for the next big thing-whether it’s eating at a restaurant owned by a celebrity chef or sleeping at a hotel that redefines extravagance. Such demand compels global hospitality chains to not just open stores in Dubai but innovate and deliver once-in-a-lifetime experiences. 

2. A Government That Supports Business 

The government of the UAE has played a crucial role in establishing a business-friendly culture that welcomes global brands. Plans such as the Dubai Tourism Strategy 2031 target the increase in the number of visitors to 40 million hotel guests per year, further driving the hospitality industry’s expansion. 

Furthermore, the presence of free zones, 100% foreign ownership measures, and tax breaks simplifies entry for international hotel and restaurant chains into the market more than ever. 

3. Events, Expos, and Everlasting Attractions 

Dubai is not all about shopping malls and skyscrapers-it’s an event city. From Expo 2020 to the Dubai Food Festival every year, the city attracts international attention on a regular basis. Such events give hospitality brands plenty of opportunities to present their offerings to millions.  

The iconic sites — Burj Khalifa, Palm Jumeirah, and the forthcoming Dubai Creek Tower — guarantee a consistent stream of tourists, keeping hotels and restaurants active throughout the year

Success Stories by Paperchase and More: Global Brands Making Waves 

Amazonico: A Jungle in the Heart of Dubai 

Originally from Madrid, Amazonico brought its rainforest-inspired dining experience to Dubai’s DIFC and quickly became a staple for food enthusiasts and celebrities. Its exotic decor, vibrant energy, and Latin American menu resonated perfectly with Dubai’s elite. Paperchase has earned continual appreciation from Amazonico for its consistent punctuality in delivering both monthly and weekly financial reports. These reports are meticulously prepared and delivered on schedule, offering a detailed snapshot of Amazonico’s financial landscape. Additionally, Paperchase promoted efficient weekly supplier payments, monthly management reports, enhanced reporting, and more.  

Nobu: Japanese-Peruvian Fusion at Atlantis The Palm 

Chef Nobu Matsuhisa’s iconic restaurant found a home at Atlantis The Palm, blending Japanese precision with Peruvian flavors. Nobu’s Dubai outpost continues to be one of the city’s most sought-after dining experiences. 

Hurricane’s Grill: Australian Vibes in the Desert 

The Australian steakhouse, Hurricane’s Grill, expanded to Dubai, bringing its signature flame-grilled meats to the Middle East. Its success is a testament to Dubai’s openness to global flavors. To learn more about the ways Paperchase helped Hurricane’s Grill become more efficient, seize new opportunities, and become a popular spot in Dubai, read the case study here 

Bulgari Hotel & Resorts: Redefining Luxury 

Bulgari Hotel in Jumeirah Bay is an icon of luxury, welcoming high-net-worth clients from across the world. Its private beach club, fine dining, and stunning views make it a prime luxury destination in Dubai. 

Paperchase can optimize your hospitality operation with day-to-day bookkeeping and accounting service. Learn how here.

The Rise of Local Champions and Sustainable Ventures 

This year, it was not just the international names making waves; the homegrown brands were thriving. Dubai-born concepts like Salt, Flamingo Room, and La Serre have built cult followings and prove that this city’s food and hospitality scene is as much about local innovation as it is about global brands. 

Sustainability is also emerging as a top priority. With campaigns such as Dubai Sustainable Tourism and collaborations with initiatives such as One Tree Planted, brands are focusing on environmentally friendly processes, from minimizing food waste to sourcing locally. 

Heineken’s recent announcement to open Dubai’s first major commercial brewery in partnership with Maritime and Mercantile International highlights a growing trend towards localized production. Set to open by 2027, the brewery aims to serve the city’s ever-expanding tourism market with freshly brewed favorites like Heineken and Amstel. 

The Road Ahead: What’s Next for the Hospitality Industry in the UAE & the Middle East? 

The hospitality industry in the Middle East is not only warming up—it’s blazing! With mega-events such as COP28 looming large, a tsunami of foreign investments, and governments extending red carpet treatment to travelers and businesses in general, the region is all set to rewrite the book on luxury and innovation in hospitality. 

Dubai: Leading the Charge 

Dubai takes its place as the UAE’s hospitality crown jewel. The emirate is diversifying its stable of Michelin-starred eateries, practicing sustainable tourism, and opening upscale hotels in next-generation hotspots such as Dubai Creek Harbour. This waterway wonder boasts breathtaking vistas and luxurious amenities, making the emirate an obvious leader in global hospitality. 

Abu Dhabi & Beyond: Rising Stars  

Not to be left behind, Abu Dhabi is also breaking waves with its cultural icons and high-profile hospitality projects.  Additionally, the Saudi Arabian restaurant market is set for considerable growth between 2024–2030, projected to reach $46.84 billion at a CAGR of 8.61%. This is largely owed to the increased average income, shifting lifestyles, a younger generation, and fast-tracked urbanization. Saudi Arabia’s Vision 2030 and Qatar’s post-World Cup drive are driving the Middle East towards a hospitality renaissance. 

A Thriving Market for Restaurants & Hotels 

The Middle East isn’t only opening its doors to travelers; it’s designing unbeatable experiences. From decadent hotels and haute cuisine to innovative culinary ideas, the area brings together tradition and modern sophistication. 

For restaurateurs, hoteliers, and entrepreneurs alike, this isn’t just a growing market—it’s an international stage. With strong economic development, a rainbow of consumers, and unyielding government commitment to tourism supremacy, the Middle East presents possibilities that are too compelling to miss. 

As the region continues to surpass the global tourism GDP, one thing is certain: its impact on the worldwide hospitality and restaurant space is stronger than ever. If you’re looking for the next big thing, the Middle East is beckoning your name. 

The Role of Paperchase in Bridging Global Businesses to Dubai 

While the Middle East is proving to be the next big thing in the world of tourism & hospitality, it can be a harsh region to tap into if unfamiliar with the nuances. There are strict food safety regulations and Halal certifications required for many restaurants. Additionally, religious customs and months, such as Ramadan, may drives down sales. 

From licensing regulations to establishing the appropriate local partnerships, companies need to fit into the region’s distinct business culture. Most brands, particularly from the UK and the US, seek the services of specialists who know the nuances of hospitality finance in the Middle East. With years of establishment in the region, companies such as Paperchase have assisted some of the industry giants like Zuma and Cipriani to start and run efficiently, ensuring that they adhere to the local tax laws, along with top-notch bookkeeping, accounting, and consulting, while achieving maximum profitability. Paperchase’s insight into regional business culture has helped brands avoid financial missteps and make the most of the opportunities available.  

Dubai’s hospitality market is one of the most competitive in the world, where success lies in balancing global appeal with local insight. With Paperchase guiding brands through accounting, bookkeeping, financial and regulatory landscapes, many have seamlessly turned ambition into reality. 

References: 

Dubai to host ATM 2024; city boasts 150,000 rooms and 17m visitors last year. (2024, April 25). Arabian Business. Retrieved from https://www.arabianbusiness.com/ 

The difference? Strategy.

For fast-casual restaurants, big-ticket sporting events like the Super Bowl and March Madness are as much about strategic planning as the food. Promotions tied to holidays and major sporting events demand a strategic, data-driven approach—far beyond the simplicity of a one-off special.

The question isn’t if restaurants should leverage these events but how to do it profitably.

These high-impact campaigns must be meticulously planned. To illustrate what success looks like, we analyzed real-world promotions from top-performing brands that drove traffic but also boosted average check sizes. Here’s what they did right—and what every restaurant should do to capitalize on these high-stakes opportunities.

Fast Casual Brands Cash In on Sports Fans

The Super Bowl isn’t just a championship game; it’s an economic powerhouse. In 2024, Americans consumed 1.45 billion chicken wings on Super Bowl Sunday alone. That’s a lot of wings! Starting with the opening Sunday of the season, wing sales increased by an average of 25%, highlighting the importance of promoting the game-time snack. Restaurants that don’t offer the dish leave actual dollars on the table.

Examples of effective execution of Super Bowl promotions can be seen across the segment. These high-demand moments allow for the creation of limited-time offers, themed menu items, and bundle deals. For example, pizza-and-wings combos, BOGO appetizers, or “Big Game” party food and beverage packs designed for groups draw crowds and drive spending.

Buffalo Wild Wings ran “Buy One, Get One Free” wing deals for the Super Bowl and reported a consistent 20% increase in sales during key sporting events, contributing to over $5.1 billion in annual sales in 2023.

Pizza powerhouse Domino’s plugged “Free extra toppings before kickoff,” which surged
orders by 40% compared to a regular Sunday.

Dozens of fast-casual restaurants and chains offer promotions on Super Bowl Sunday.
However, brands leveraging effective marketing, digital exclusives, and delivery bundles win the
revenue game.

The March Madness Factor

The Super Bowl may own February, but March is a powerhouse month in its own right. Corned beef and Irish stout specials for St. Patrick’s Day lead directly into the madness of the NCAA college basketball tournament. March Madness is not just one night—it’s weeks of games filled with office brackets, last-minute bets, and a perfect excuse to go out for burgers, beers, and basketball. Restaurants that ride the wave with game-day happy hours, watch-party specials, and online order incentives create an extended revenue stream instead of a one-time boost.

Partnerships with the NCAA to run campaigns such as Buffalo Wild Wings’ “Overtime Wing Guarantee,” where customers get free wings if a tournament game goes into overtime, are a smart strategy. They promoted the campaign on social media and tied it to sports betting trends. They reported a 15%+ increase in foot traffic during the tournament and a spike in loyalty program signups.

Playoff Promotions

When the hometown baseball team is still swinging in October or the local NHL and NBA squads are chasing a championship, fast-casual restaurants can hit their own winning streak. While these playoff runs might not have the nationwide hype of the Super Bowl or March Madness, they create a golden opportunity for restaurants with a game-ready promotions strategy.

Shake Shack’s marketing geniuses promoted a limited-edition milkshake that was available only on game days and free fries for fans wearing local team gear. Paired with mobile-ordering discounts, the chain saw a 30% increase in mobile orders and a 20-25% increase in foot traffic at stadium-adjacent locations on game day.

Similarly, Burger King advertises in-app flash deals activated in real-time, such as Buy One,
Get One Whoppers for home run hits during playoff games.

QSR’s Offer Budget-Friendly Romance

Date-night romance isn’t just for fine dining establishments. QSR’s are cashing in on prix fix menus and a casual, fun way to celebrate love. Whether it’s Valentine’s Day, anniversaries, or New Year’s Eve, fast-food chains leverage romance-driven promotions to drive sales and boost customer engagement.

Chili’s Valentine’s Day “Dinner for Two” features special fixed-price menus, which boost check averages by 25-30% and streamline operations. Even fast food giant McDonald’s offered a candlelit McDonald’s experience with table service, unique decorations, and a prix-fixe menu featuring Big Macs, fries, and sundaes that sold out in minutes. When White Castle ran a similar promotion, they experienced 100% capacity and a 14% increase in average check size.

And Krispy Kreme’s “Sweetheart Dozen” pack sales account for 40% of February total sales.

Separating Winning Promotions from Costly Gimmicks

The smartest QSR spots don’t just watch the action—they cash in on the excitement, turning couples and fans into loyal customers. Why are some promotions instant money-makers while others barely boost tickets? The answer is exceptional execution.

Without careful planning, promotions can eat into margins. Paperchase’s accountants track multiple financial measures, ensuring that special offers increase overall revenue without sacrificing profitability.

Ingredient costs

Labor expenses

Tech utilization

Paperchase can optimize your hospitality operation with day-to-day bookkeeping and accounting service. Learn how here.

Winning Plays for Any Restaurant

• Limited-Time Offers that Create Urgency
  • Super Bowl snack bundles? Yes.
  • Valentine’s Day prix fixe promising high-end items not offered on the regular menu? Absolutely.
  • Month-long promos with no connection to customer demand? Pass

Quick, precise campaigns that create demand for high-margin items (think pizza or themed cocktails) or encourage add-ons of low-cost items (like toppings for fries) have the best profitability versus more extended promotions. If the customer thinks they are getting a deal and fear they’ll miss it by waiting, they’ll not only pay for the promo, but purchase additional items on impulse.

• Hyper-targeted Web Marketing
  • Social media teasers: Give customers a sneak peek of the exclusive offer.
  • Coupon offers: Build contacts by offering additional discounts or giveaways in exchange for an email.
  • Email campaigns: Send loyal guests early access to promotions.
  • Paid ads with laser focus: Geo-targeted ads to sports fans or couples looking for a night out.

Using platforms like social media and paid ads will entice a new crowd and create opportunities to convert new patrons into regular customers through excellent service and impressive dishes. To build anticipation, utilize social media platforms to promote upcoming event-specific deals and share behind-the-scenes content, chef interviews, or customer testimonials.

• A Seamless Experience
  • Make online ordering effortless for sports events.
  • Ensure reservation systems can handle Valentine’s Day traffic.
  • Immerse your customers in the experience with themed decor.
  • Train staff on upselling—because that extra glass of wine or dessert isn’t just for romance, it’s for profit.

Beware of Foul Plays

Seasonal events can create cash flow fluctuations. The Paperchase team helps restaurants budget for high-demand periods, ensuring they have adequate inventory, labor coverage, and financial stability before, during, and after promotional events.

Other factors to consider are,

• Neglecting Advance Planning: Failing to prepare for increased demand can lead to stock shortages and overwhelmed staff. Plan for increases in inventory and staff needs before major events to ensure repeat visits.
• Overcomplicating the Menu: Introducing too many new items can overwhelm wait staff, strain kitchen operations, and confuse customers. Keep event menus focused and manageable.
• Ignoring Customer Feedback: Use customer comments and reviews from past events to gather feedback and inform future promotions.

The Final Call: Make the most of big moments

Events like the Super Bowl, March Madness, and Valentine’s Day aren’t just dates on a calendar—they’re golden opportunities for restaurants to boost revenue and visibility. The key is designing promotions that make sense and executing them with precision.

By aligning financial strategy with promotional planning, Paperchase ensures that our clients don’t just ride the wave of organic momentum—they maximize its potential for long-term revenue growth.

Whether it’s a Super Bowl wing deal, a New Year’s Eve prix-fixe menu, or a Valentine’s date night special, Paperchase helps turn seasonal demand into lasting financial success.

The year 2024 was a milestone for the UAE’s hospitality sector, solidifying its status as a global powerhouse in tourism and hospitality. From the vibrant energy of Quick Service Restaurants (QSRs) to the sophistication of fine dining, and from opulent luxury hotels to charming mid-scale accommodations, the industry experienced a remarkable resurgence. Here’s a closer look at the performance, key drivers, and challenges that shaped this renaissance.

Quick Service Restaurants (QSRs): A Thriving Segment

2024 was a banner year for the QSR market, which benefited from the UAE’s fast-paced lifestyle and the increasing demand for affordable dining options.

Revenue Growth and Expansion:

The QSR segment saw double-digit growth, driven by the rise in tourist arrivals and a strong preference for convenient, high-quality meals. Leading global and local QSR brands expanded aggressively, particularly in Dubai and Abu Dhabi, where footfalls in malls and busy transit hubs skyrocketed.

Digital Transformation:

Online ordering platforms and app-based delivery services played a critical role in the QSR market’s success. Innovations such as AI-powered menu customization and drone deliveries helped businesses streamline operations and enhance customer experiences.

Sustainability in Focus:

Many QSR brands adopted eco-friendly practices, including biodegradable packaging and waste-reduction initiatives, in alignment with the UAE’s sustainability goals.

Source: Gulf Business QSR Market Insights 2024

Fine Dining: Culinary Excellence on the Rise

In 2024, the UAE’s fine dining scene flourished, reinforcing its status as a global culinary hub that appeals to a cosmopolitan audience and attracts world-class chefs.

Michelin-Starred Magic: Dubai and Abu Dhabi experienced a notable increase in Michelin-starred restaurants, drawing both residents and international visitors. These establishments have significantly enhanced the country’s global culinary reputation and contributed to the growth of the fine dining sector.

Source: Conde Nast Traveler & BBC

Luxury Redefined: The year witnessed a surge in exclusive dining experiences, including chef’s table events, immersive dining, and fusion cuisines that blend global flavors with Emirati traditions. This trend reflects the UAE’s commitment to offering unique and luxurious culinary adventures.

Source: The Times

Innovation in Experiences: Restaurants embraced technology and personalization, introducing interactive menus, AI-based wine pairings, and augmented reality dining experiences to captivate their clientele. Such innovations have been pivotal in enhancing customer engagement and satisfaction.

Source: Conde Nast Traveler

These developments underscore the UAE’s dynamic and evolving fine dining landscape, positioning it at the forefront of global culinary excellence.

Hotels: The Crown Jewel of UAE Hospitality

he UAE’s hotel sector experienced significant growth in 2024, driven by increased tourist arrivals and substantial infrastructure developments.

Surge in Occupancy and Revenue:

In the first half of 2024, Dubai’s hotel market demonstrated a notable recovery, with an average Revenue Per Available Room (RevPAR) growth of 4.7% compared to the same period last year. The upscale sector experienced the largest average growth of around 9.0% in RevPAR. Dubai’s tourism sector continues to flourish, guided by the ambitious Dubai Economic Agenda D33 outlined by the Ruler of Dubai – Sheikh Mohammed Bin Rashid Al-Maktoum. Surpassing pre-pandemic benchmarks, the sector contributed AED 220 billion to the UAE’s GDP in 2023, marking an 11.7% growth. Projected to rise to AED 236 billion in 2024, tourism is set to represent 12% of the nation’s GDP, solidifying Dubai’s goal of ranking among the top three global tourism destinations.

Source : Cavendish Maxwell

Expansion and Employment Opportunities:

The UAE’s hospitality sector continued to expand, with numerous luxury and mid-range hotel openings contributing to economic growth and job creation. The average hotel occupancy rate across the seven emirates increased to 77.8%, placing it among the highest worldwide. Hotel stays reached around 75.5 million from January to September 2024, representing an 8% year-on-year rise.

Source : The Finance World

Challenges of Rising Costs:

Despite operational challenges, including escalating real estate rents and housing costs for workers, the UAE’s hotel sector showcased resilience and adaptability, maintaining its growth trajectory. Revenue from hotel establishments in the UAE increased to AED 33.5 billion during the first nine months of 2024, reflecting a 4% increase compared to the same period in 2023.

Source : Zawya

Accor, Europe’s largest hotel group, has projected a 4-5% growth in its revenue per available room (RevPAR) for 2024, surpassing its medium-term target. This growth is attributed to strong regional and brand performance, despite global economic uncertainties. An Oxford Economics study cited by Accor highlights the positive global travel trends supporting the industry’s recovery.

Source : Reuters

These developments underscore the UAE’s dynamic hospitality landscape, positioning it at the forefront of global tourism and leisure.

The Overall Hospitality Landscape

The synergy between QSRs, fine dining, and hotels painted a vibrant picture of the UAE’s hospitality sector in 2024.

Economic Contribution:

Hospitality emerged as a major driver of the UAE’s GDP, supported by a diverse tourism portfolio that catered to leisure, business, and cultural travelers.

Franchising and Brand Collaborations:

Franchising became a strategic avenue for growth across all segments, allowing global brands to tap into the UAE’s burgeoning market.

Sustainability Initiatives:

Across the board, businesses prioritized eco-friendly practices, aligning with the UAE’s Net Zero 2050 Strategy. This included the use of renewable energy in hotel operations, sustainable sourcing in restaurants, and waste management programs in QSR chains.

Source: UAE Ministry of Economy Hospitality Report 2024 & Reuters

Paperchase provides strategic financial consulting to businesses of all sizes. Learn more here.

Looking Ahead

As the UAE moves into 2025, the momentum from 2024 sets the stage for even greater growth. With significant investments in technology, infrastructure, and culinary innovation, the UAE’s hospitality sector is poised for continued success. Expected to reach a valuation of USD 7 billion by 2026, the sector is reinforcing the UAE’s global tourism dominance. Notably, Abu Dhabi’s Department of Culture and Tourism recorded 4.8 million hotel visitors in 2024, reflecting the city’s growing appeal as a top-tier destination for both leisure and business travelers. The future looks incredibly promising for the UAE’s hospitality industry.

Source: Les Roches & ANI