Year-on-year, 95% of hospitality businesses have experienced increased wage costs. It’s a similar story for food (89%), insurance (84%) and energy (57%) costs. That’s according to findings of a new survey by the British Beer & Pub Association, British Institute of Innkeeping, Hospitality Ulster and UKHospitality.
As new inflation figures reveal today (Wednesday 14 August 2024), inflation in hospitality remains notably higher than the headline rate would suggest.
Hospitality businesses are overwhelmingly in favour of reforming business rates, a Government manifesto commitment, to help reduce costs, which must be a priority at the Budget, with 80% of respondents clear it would have a positive impact on their business.
In addition to business rates reform, businesses said both a VAT reduction for hospitality (85%) and a reduction in alcohol duty (34%) would be an important measure to allow their business to grow, in a CGA by NIQ survey carried out in July 2024.
Overwhelming desire
In a joint statement, the trade bodies said: “It’s crystal clear that there is an overwhelming desire from the hospitality sector that the Government rapidly delivers on its manifesto commitment to replace business rates and reduce the burden on high street businesses, as well as continue current support.
“Hospitality continues to remain an outlier sector, with costs continuing to rise sharply compared to the rest of the economy.
“With cost increases affecting almost every venue, this vital sector is being prevented from investing in businesses and communities, which would boost economic growth and new jobs. Instead, they’re having to use dwindling cash reserves just to pay the bills.
“The clock is ticking, with a cliff-edge looming on 1 April when relief ends and rates are set to increase again. Inaction would see bills spiral yet further, putting venues under increased threat of closure.
Additional burden
“Alongside our members, we hope to see clear and decisive action toward delivering on the Government’s manifesto commitment from the chancellor at the Budget in October.”
Meanwhile, CEO Michael Kill of fellow trade body, the Night-Time Industries Association, added: “We have observed the slight uptick in inflation from 2% to 2.2% in July, but for our sector, the impact will be minimal.
“The real focus for night-time economy businesses remains firmly on the upcoming Autumn Budget. With a growing Government narrative around the voids in public funding that are fuelling inevitable tax increases by the chancellor on 30 October, the potential for further tax increases could place an additional burden on businesses still recovering from the challenges of recent years.
“The Autumn Budget must not lose sight of the fragility of our sector, and prioritise the continuation of support for our sector, ensuring we are not left behind during this critical period.”
