Quarter of hospitality venues have run out of money, survey finds
The rising costs experienced by businesses have left 64% not optimistic about their business’s prospects for the next 12 months
A quarter of hospitality businesses have no cash reserves and a further 29% have less than three months’ worth, according to a joint survey by UKH, the BBPA, BII and Hospitality Ulster.
The joint survey also found that 98% of businesses have seen food and drink costs increase, while 96% have seen wage costs increase, with 98% also being concerned about the National Living Wage rise in April.
Meanwhile, some 85% of hospitality venues have seen their energy costs increase.
As a result, the rising costs experienced by businesses have left 64% not optimistic about their business’s prospects for the next 12 months. This has increased by 6% compared with October 2023.
Respondents were clear about their priorities for government action at the forthcoming Budget, with 94% prioritising a lower rate of VAT. A lower business rates multiplier for hospitality (80%) and business rates reform (71%) rounded out the top three priorities.
Reducing employer National Insurance Contributions (51%), further energy support (48%), capping the business rates increase in April (44%) and reducing the rate of alcohol duty (44%) were also popular amongst respondents, illustrating the need for measures to address the sector’s high cost and tax burden.
In a joint statement, the trade bodies said: “These results clearly show the perilous state our pubs, restaurants, hotels and cafes find themselves in. The fact that a quarter has run out of cash reserves completely is a real cause for concern. Those businesses are extremely vulnerable to the slightest shock forcing them to shut their doors for good.
“We’ve already seen too many good businesses shut up shop and that has left cities, towns and villages without a vital community asset where people can meet, host events and share enjoyable experiences. These businesses need urgent support. Hospitality is the foundation of the everyday economy and absolutely vital in the services they provide.
The statement added: “If the government wants to avoid further inflationary price rises for the public and further closures across hospitality, they need to heed the message from our members to act now. We urge the Chancellor to act on his Budget next month.”
