Hospitality leaders are calling on the government to help them survive the impact of increasing costs.
They want support with inflationary pressures posed on the sector as well as the introduction of a new tax and investment regime. They also want to see reforms that would unleash growth potential.
As it stands, only 37 per cent of hospitality businesses are still turning a profit, according to sector survey data. The biggest factors behind this figure are the rising cost of energy (74 per cent), goods (55 per cent) and labour (54 per cent).
What’s more, only 28 per cent of businesses such as pubs, bars and restaurants are even considering investing back into their business because of the economic climate.
Despite the government’s post-Covid hospitality strategy, which was released almost a year ago, 45 per cent of businesses have been forced to reduce their opening hours so that they don’t have to close permanently, while 17 per cent have no cash reserves.
In a joint statement, the British Beer and Pub Association, the British institute of Innkeeping and UKHospitality said: “Our industry has huge growth potential and the ability to play a critical role in the levelling up of communities in every single part of the UK, but we are still struggling to get back on our feet after a turbulent two years.”
The organisations – which represent 115,000 venues – said that in the past few weeks inflation had caused the cost of ingredients and utilities to skyrocket while customer numbers declined. They added: “We are weathering a perfect storm, but we can’t hold on for ever; we need relief as soon as possible before the cost of doing business forces venues to close for good.”
Last week’s rail strikes are said to be a contributing factor. UKHospitality estimates that this cost hospitality £540m on top of a 20 per cent fall in spending in towns and cities.
David Moore, the owner of Pied à Terre, told The Times: “The 9.5 per cent inflation figure is a myth — it feels like more like 15 per cent to 20 per cent — and even the most basic of ingredients are spiking in price. Coupled with a week of train strikes last week, the industry is on its knees. We lost £30,000 of trade last week alone.”
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