Third of hospitality firms at risk of going under, says UKH
It said cost pressures, alongside ongoing labour shortages and Covid-19 debt, has left many hospitality businesses in a ‘perilous position’
UKHospitality has revealed that 32% of hospitality firms are at risk of failure within the next year, despite hospitality sales in 2022 surpassing pre-Covid levels.
The hospitality association said this is because sales remain “significantly behind 2019” in real terms due to inflation.
The UKHospitality Quarterly Tracker, in association with CGA, found that revenues were up 4.2% in 2022 compared with 2019, but down 13% in real terms when inflation is accounted for.
It said cost pressures, alongside ongoing labour shortages and Covid-19 debt, has left many hospitality businesses in a “perilous position”.
As such, UKHospitality said it is urging the chancellor to address the root causes of inflation in the Budget. It is calling for intervention in the energy market, Apprenticeship Levy reform and a new business rates multiplier to provide an immediate boost to the sector and prevent business failures, allowing those that survive to invest, employ and grow.
UKHospitality chief executive Kate Nicholls said: “These figures show the challenging position the sector is in. The demand from the public is quite clearly there, with revenue exceeding pre-Covid levels, but there is no way venues can take advantage of this demand as they drown amidst price rise after price rise.
“Without action, we can see just how stark the year ahead could be with a third of businesses at risk of failure. Venues are simply unable to pass prices onto the consumer at the same rate they are experiencing their own costs rise.”
She added: “…Intervening in the energy market to stop unscrupulous behaviour by energy suppliers, reforming the Apprenticeship Levy and tackling disproportionate business rates would signal his commitment to the everyday economy and its ability to lift the nation out of its economic slump.
“People up and down the country want to support their local pubs, restaurants, coffee shops and hotels, to name just a few. If the chancellor allows those venues to take advantage of that support, we can turn record sales into real terms growth.”
