1/3rd of all hospitality businesses now operating at a loss

ne third of hospitality businesses are now operating at a loss following the £3.4bn of additional costs that hit the sector in April – an 11% increase on the last quarter, according to new research.

The survey by UKHospitality, The British Institute of Innkeeping, the British Beer & Pub Association and Hospitality Ulster, also revealed six in ten have had to cut jobs, and 63% have reduced the hours available to staff in order to try and mitigate the increases and stay afloat.

The trade bodies said the findings lay bare the impact of recent increases to employers’ national insurance contributions and the changes to business rates on hospitality businesses.

More than half of operators said they have been forced to cancel investment and, with 76% of hospitality operators reporting they have had to increase prices, there is also a knock-on effect to consumers and the wider economy.

In a joint statement, the trade bodies said:

“The government seems to be setting itself up to miss its own targets with these most recent cost hikes for the hospitality sector. Hospitality is vital to the UK economy but is under threat from ongoing costs rises, which the April increases have only exacerbated.

Jobs are being lost, livelihoods under threat, communities set to lose precious assets and consumers are experiencing price rises when wallets are already feeling the pinch.

The government must act urgently to mitigate for the changes to employers’ national insurance contributions and deliver on its promise of root and brand business rates reform.

The overall tax burden on our sector must be reduced, including consideration of the long-standing ask of a VAT cut for the sector, so the hospitality industry can return to investment, job creation and growth in communities the length and breadth of the country".

Let us help you to try to mitigate these new costs. Call us now on 01277 364 655 or email enquiries@equinoxesolutions.com