Quarter of hospitality businesses have no cash reserves

A joint survey by the British Beer and Pub Association, British Institute of Innkeeping, Hospitality Ulster and UKHospitality has revealed the cost pressures facing venues.

It shows the overwhelming majority of businesses have seen costs rise across the board, and are struggling with additional pressures.

According to the data, 98% of businesses saw food and drink prices rise, while 96% said that wage costs had increased, and 96% also said they were concerned about the National Living Wage rise in April.

Rising costs experienced have left almost two-thirds of feeling not optimistic about their business’s prospects for the next 12 months, an increase of 6% compared to October 2023.

Respondents were also asked about what the priorities for the UK Government for the upcoming budget should be, and 94% said that a lower rate of VAT should be prioritised.

A lower business rates multiplier for hospitality (80%) and business rates reform (71%) rounded out the top three priorities.

Reducing employer National Insurance Contributions (51%), further energy support (48%), capping the business rates increase in April (44%) and reducing the rate of alcohol duty (44%) were also popular amongst respondents.

In a joint statement, the trade bodies said: “It’s clear that 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 want 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.”