May 13, 2025

Restaurant and Hospitality Industry Gains Are Positive, But Are They Sustainable?

We polled 1,000 senior leaders of privately held companies spanning industry sectors across the nation to take stock of actions, concerns, and challenges in key areas including financial performance for restaurant and hospitality companies. Our 2025 Private Company Performance Report sheds light on the growth trends and challenges reported by our survey respondents.

Growth Trends

The restaurant and hospitality industry calmed down a bit from thriving throughout 2022 and 2023’s post-pandemic demand. We’re seeing very mixed results as far as top and bottom-line fluctuations when comparing 2024 to 2023. This variation has been dependent on geography, sub-industry, and customer base. We have major cities in the U.S. like Chicago and Dallas that saw guest counts increasing 14-17%, cities like New York and Los Angeles that were flat, and cities like Miami and Baltimore that were down 6-8%. The industry is heavily impacted by consumer confidence, which has been waving back and forth for more than a year, and we expect that this volatility to continue as a new political administration settles in.

When picking apart the survey results, we noticed that 50% of the larger restaurant and hospitality groups (annual revenue over $500 million) claimed to experience “significant growth”, while only 19% of the smaller groups (annual revenue less than $50 million) claimed similar results. This indicates that the larger groups have done a better job entering thriving markets, capitalizing on 2024’s wave of chain restaurant bankruptcies, and scaling their digital marketing and reservation systems. We also noticed that while 50% of the larger groups saw significant growth in revenue, only 36% of large groups saw significant growth in earnings, which indicates that many respondents generated significant growth in revenue only to maintain their growing operating expenses.

Looking Ahead

We predict this trend will continue, especially as the industry navigates legislative hurdles such as increases to minimum wage, tariffs that will most notably impact products like coffee and wine, workplace safety that can be viewed as impractical, and scattered state and local initiatives related to plastic reduction. Larger groups have the resources to tackle these matters at an early stage and invest in solutions, whereas smaller groups will have to work a little harder to keep up with compliance while maintaining profitability. Nonetheless, big or small, this industry is comprised of persevering creators who fought for their livelihood five short years ago during the COVID-19 pandemic, so while they face some headwinds, innovative and/or convenient hospitality offerings will continue to drive them forward.

In the second half of 2025, Citrin Cooperman will be releasing its annual restaurant benchmarking survey diving into multiple levels of financial performance, margins, and profitability. See last year’s study here and check back later in the year for our 2025 study.

Citrin Cooperman’s Private Company Performance Report

Citrin Cooperman has been serving and advising middle-market, private companies and high net worth individuals for over 40 years and created an annual Private Company Performance Report to discuss what is top of mind for business leaders across the country. Access our report to discover valuable insights into the trends, opportunities, and challenges facing businesses today.

Access the 2025 Private Company Performance Report