One third of hospitality businesses are operating at a loss
The number of hospitality businesses operating at a loss has increased by 11% in just the last quarter. Industry bodies are now calling for a reversal to NI changes, a VAT reduction for hospitality and lower business rates. The post One third of hospitality businesses are operating at a loss appeared first on The Drinks Business.
The number of hospitality businesses operating at a loss has increased by 11% in just the last quarter. Industry bodies are now calling for a reversal to NI changes, a VAT reduction for hospitality and lower business rates.
Hospitality businesses are buckling under the pressure of £3.4billion in extra costs that hit the sector in April, according to a new survey of hospitality operators from across the sector.
One third of hospitality businesses are now operating at a loss, 11% higher than last quarter.
Trade bodies UKHospitality, The British Institute of Innkeeping, the British Beer & Pub Association, and Hospitality Ulster have said recent increases to employer National Insurance Contributions (NICs) and the changes to Business Rates on hospitality businesses are to blame.
“Hospitality is vital to the UK economy but is under threat from ongoing costs rises, which the April increases have only exacerbated. Jobs are being lost, livelihoods under threat, communities set to lose precious assets, and consumers are experiencing price rises when wallets are already feeling the pinch," the industry bodies said in a joint statement.
According to the survey undertaken in May, 6 in 10 report that they have had to cut jobs, and 63% have reduced the hours available to staff, in order to try and mitigate the increases and stay afloat.
More than half of operators said they have been forced to cancel investment. The impact is also being passed on to consumers and the wider economy as 76% of hospitality operators reporting they have had to increase prices.
The trade bodies are calling for a reversal to Employer National Insurance changes, a VAT reduction for hospitality and expedited delivery of lower business rate multipliers.
They said that without swift action, Government targets, including ambitions to hit 80% employment and high street renewal, look "doomed to fail".
In a joint statement, the trade bodies said: “The Government seems to be setting itself up to miss its own targets with these most recent cost hikes for the hospitality sector."
The statement continued: “The Government must act urgently to mitigate for the changes to Employer NICs and also deliver on its promise of root and brand Business Rates reform. The overall tax burden on our sector must be reduced, including consideration of the long-standing ask of a VAT cut for the sector, so the hospitality industry can return to investment, job creation, and growth in communities the length and breadth of the country.”
Hospitality businesses are buckling under the pressure of £3.4billion in extra costs that hit the sector in April, according to a new survey of hospitality operators from across the sector.
One third of hospitality businesses are now operating at a loss, 11% higher than last quarter.
Trade bodies UKHospitality, The British Institute of Innkeeping, the British Beer & Pub Association, and Hospitality Ulster have said recent increases to employer National Insurance Contributions (NICs) and the changes to Business Rates on hospitality businesses are to blame.
“Hospitality is vital to the UK economy but is under threat from ongoing costs rises, which the April increases have only exacerbated. Jobs are being lost, livelihoods under threat, communities set to lose precious assets, and consumers are experiencing price rises when wallets are already feeling the pinch," the industry bodies said in a joint statement.
According to the survey undertaken in May, 6 in 10 report that they have had to cut jobs, and 63% have reduced the hours available to staff, in order to try and mitigate the increases and stay afloat.
More than half of operators said they have been forced to cancel investment. The impact is also being passed on to consumers and the wider economy as 76% of hospitality operators reporting they have had to increase prices.
The trade bodies are calling for a reversal to Employer National Insurance changes, a VAT reduction for hospitality and expedited delivery of lower business rate multipliers.
They said that without swift action, Government targets, including ambitions to hit 80% employment and high street renewal, look "doomed to fail".
In a joint statement, the trade bodies said: “The Government seems to be setting itself up to miss its own targets with these most recent cost hikes for the hospitality sector."
The statement continued: “The Government must act urgently to mitigate for the changes to Employer NICs and also deliver on its promise of root and brand Business Rates reform. The overall tax burden on our sector must be reduced, including consideration of the long-standing ask of a VAT cut for the sector, so the hospitality industry can return to investment, job creation, and growth in communities the length and breadth of the country.” 
