According to a new national survey by hospitality trade bodies, 58% of businesses say they will have to reduce the number of staff they employ and/or increase prices if the Budget does not deliver necessary business support.
The warning from members of UKHospitality, the British Institute of Innkeeping (BII), the British Beer & Pub Association (BBPA) and Hospitality Ulster comes at a time when hospitality is under intense financial pressure, with jobs, livelihoods and communities already hit hard by the impact from last year’s Budget.
The survey reveals that almost three-quarters (73%) of businesses have less than six months of cash reserves. Three in 10 businesses (29%) report they have no cash reserves – a record high.
Members also reveal that:
- Half of businesses have been forced to cut staff and 60% have reduced staff hours. On average, the number of hours available to staff has decreased by 8%, compared to this time last year.
- 70% of respondents have already increased prices since April, when £3.4bn of additional annual cost hit hospitality. On average, prices have increased by 5% since April.
The worsening economic situation facing hospitality businesses requires ‘urgent action’, the group said, with members citing the maximum possible business rates discount (61%), amending April’s changes to employer NICs (54%) and a cut in VAT (84%), as the Government actions that can help their business.
In a joint statement, the trade bodies said: “The situation facing our local pubs, neighbourhood restaurants and other hospitality venues is becoming increasingly perilous.
“Economic pressures are mounting at every turn and businesses have been forced to make tough decisions to cut jobs, reduce staff hours and put up prices. Many have already had to close the doors for the last time, leaving communities without the support local hospitality venues provide as a local hub.
“For those surviving, the situation is becoming more worrying. Cash flow is becoming a serious issue, with three-quarters of businesses with less than three month’s cash reserves. Those with no cash reserves – a critical safety net – has reached a record high.
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“This is an urgent situation that demands urgent action at the Budget.
“No one wants to see jobs and communities hit even further, but it’s clear that they will once again be impacted if there is not adequate support for our sector at the Budget next week.
“Lower business rates, amendments to employer NICs and a cut to VAT are the measures that will deliver the relief and stability that hospitality desperately needs. We urge the Chancellor to act next week to protect cherished local venues, which support local jobs, economies and communities.”
