1 in 4 firms out of cash
According to a joint survey from trade bodies UKHospitality (UKH), the British Beer & Pub Association (BBPA), the British Institute of Innkeeping (BII) and Hospitality Ulster also found 98% of respondents had seen food and drink costs rise.
Some 96% had seen wages increase while 98% were concerned about the upcoming national living wage rise in April and 85% had seen a hike in energy costs.
The rocketing costs have left 64% of firms pessimistic about their business’ prospects for the next 12 months – a rise of 6% compared to October last year.
The large majority (94%) of respondents want a lower VAT rate announced at the forthcoming Budget.
Perilous state
A lower business rates multiplier for the sector was the top priority for 80% of those who participated in the survey while business rates reform was the chosen option for 71%.
A joint statement said: “These results clearly show the perilous state our pubs, restaurants, hotels and cafés find themselves in.
“The fact a quarter have run out of cash reserves completely is a real cause for concern. Those businesses are extremely vulnerable to the slightest shock, forcing them to shut their doors for good.
“We’ve already seen too many good businesses shut up shop and that has left cities, towns and villages without a vital community asset where people can meet, host events and share enjoyable experiences.
“These businesses need urgent support. Hospitality is the foundation of the every day economy and absolutely vital in the services they provide.”
No business immune
The trade bodies said steps to help the sector would not only keep businesses afloat but would also lead to further investment.
It added: “It’s clear practically no business has been immune to the relentless price increases that have plagued the sector and can absorb costs no longer, with many already forced to pass these onto customers.
“If the Government wants to avoid further inflationary price rises for the public and further closures across hospitality, they need to heed the message from our members to act now.
“Addressing the looming business rates increase, implementing a lower rate of VAT for hospitality and cutting duty would be good news for businesses, consumers and the economy. We urge the Chancellor to act at his Budget next month.”
