More than a third of hospitality businesses ‘on the brink' of closure

More than a third of hospitality businesses are "on the brink" of going bust in early 2023 due to spiralling costs, according to a recent report.

The Q4 Hospitality Members' Survey conducted by UKHospitality, the British Beer and Pub Association (BBPA), the British institute of Innkeeping (BII) and Hospitality Ulster revealed that 35% of operators expect to trade at a loss by the end of the year.

More than nine in ten participants reported that they are experiencing higher energy costs (96%) and soaring food price inflation (93%).

Customers have also been hit with the cost-of-living crisis, with more than three-quarters of operators (77%) noticing a reduction in people eating and drinking out.

Some 85% of hospitality businesses predict this trajectory will worsen in the coming months.

Almost nine in ten (86%) operators are pessimistic that current levels of support provided by the government will be enough to sustain the industry over the next six months.

The survey also indicated that business confidence is 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.

The group's added: "If the Government wants to be turbo-charging sectors of the economy, our dynamic hospitality industry is prime to grow. But it needs to survive this generational crisis first.

"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.

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