Calls for support for hospitality businesses 'in perilous position'

The UKHospitality Quarterly Tracker, in association with CGA, has shown hospitality revenue was up 4.2 per cent in 2022 compared to 2019, but down 13 per cent in real terms when inflation is accounted for. A report says that cost pressures, alongside ongoing labour shortages and Covid-19 debt, has left many hospitality businesses in a 'perilous position'.

The latest Q1 Hospitality Members Survey showed that almost a third (32 per cent) of businesses were at risk of failure in the next year. UKHospitality has now urged the Chancellor, Jeremy Hunt, 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: “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. If the Chancellor wants to stem the bleeding in hospitality and stop those price rises, which unfortunately contribute to inflation, he can take action in the Budget.”

Mike Goodall, development officer for the Shropshire, Hereford and Worcester area for the Federation of Small Businesses, added: “There is still optimism out there but our survey found the least confident, looking forward, were in retail, hospitality and leisure due to general economic conditions and people tightening their belts generally because of the cost-of-living crisis. The high business costs generally in that sector, with wages, business rates and so forth, have been amplified by the increase in energy costs which was almost the straw that broke the camel’s back for some.

“Hospitality has been one of the hardest hit sectors but the FSB will be pushing the government hard to introduce measures to help off-set some of those increased costs, such as action on business rates plus an increase in the VAT threshold.

"We are also pushing the government on something called a help to green voucher. It is a financial incentive for businesses to adopt green measures.”