The survey, which involved 198 NTIA members in England, Scotland, and Wales, showed an average increase of 18% in stock and workforce expenses, a 29% rise in utility costs and a 31% increase in insurance prices all contributed to the overall rise in total operating costs.
NTIA CEO Michael Kill said: “These statistics show just how bleak things remain for our sector.
“There is a temptation to think that, because it feels as if the pandemic restrictions are now behind us, that nightlife will just snap back to its pre-pandemic strength and everything will be fine.
Severe economic headwinds
“Sadly, this couldn’t be much further from the truth.”
This comes as businesses are yet to be hit by April’s “perfect storm” of further financial strains such as a rise in Employers’ National Insurance by 1.25 percentage points, the National Living Wage increase to £9.50 per hour, end of pandemic moratorium on legal action by creditors, VAT returning to 20%, businesses rates relief reducing and proposed changes to Alcohol Duty on higher ABV products.
Kill added: “We are still running into severe economic headwinds, and April threatens to be a perfect storm for the sector.
“I would now even at this late stage urge the Chancellor to postpone all the tax increases – on national insurance, VAT and business rates – to give some perfectly viable night-time economy businesses a fighting chance of survival.”
Also revealed in the survey, participating businesses were operating at an average of 68.9% of pre-pandemic levels, showing the sector is still feeling the effects of the pandemic.
Of the 198 businesses surveyed, 90% said they would require further support from the Government to survive, with the main request being an extension of the reduced rate of VAT and businesses rates relief, as well as further Government grants.
Nights out made more expensive
Businesses also feared the coming cost of living crisis in the wider economy could have a damaging effect on the night-time economy sector, with things like a night out likely to be among the first things consumers cut down on in their efforts to ensure they can pay their own bills.
Kill said: “It is unfortunately the case when you see enormous cost increases of the kind we have felt in our sector, for the vast majority of businesses there is little else they can do other than pass these on to consumers.
“Sadly, what this will mean is people’s well-earned nights out being made considerably more expensive, just when they are themselves struggling with their own cost of living and trying to decide which monthly expenses they can do without.”