More than a third of the UK’s hospitality sector is at risk of business failure this winter due to the cost crisis, according to a new survey by UKHospitality, the British Beer and Pub Association and the British Institute of Innkeeping.
The organisations’ joint survey - completed by 506 pubs, restaurants, bars, hotels and other hospitality venues - showed that 35% were expecting to be operating at a loss or be unviable by the end of the year, with 96% experiencing higher energy costs and 93% facing food price inflation.
The impact of the cost crisis on customers is also being felt, with more than three quarters of operators (77%) seeing a decrease in people eating and drinking out, and 85% expect this to worsen going forwards.
As a result, 89% are either not confident or pessimistic that the current levels of support offered by government will protect the industry in the next six months.
Continued uncertainty about rising inflation, future regulation and staffing is causing a crisis of confidence among business owners - dipping lower than at any point during the pandemic.
In a joint statement, the trade associations said: “The results clearly lay out the stark situation facing hospitality businesses, with many on the brink due to the cost of doing business crisis.
“The vulnerability of the sector due to soaring energy costs, crippling rises in the cost of goods and dampening consumer confidence is on full display in this survey and if urgent action isn’t taken, it is looking incredibly likely that we will lose a significant chunk of Britain’s iconic hospitality sector in the coming weeks and months.
“Further business rates relief is absolutely critical to avoid businesses facing a cliff-edge in April next year and, in the long-term, a move to cut VAT for hospitality would do wonders in giving consumers the confidence they need to support their local hospitality businesses, which are so important to our local communities and the economy.
“We would all encourage the new Prime Minister to work with the sector on these suggested measures and what further action can be taken to ensure hospitality continues to thrive well into the future.”
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