Increases to employment costs, including rises to the national living wage and national minimum, alongside revaluations for business rates are set to come into force today (Wednesday 1 April).
Data from member surveys conducted by UKHospitality (UKH), the British Beer & Pub Association (BBPA), the British Institute of Innkeeping (BII) and Hospitality Ulster showed the damaging impact of these price hikes for the sector.
Those surveyed said they could be forced to cut jobs (64%), cancel investment plans (51%) and reduce trading hours (42%) as a direct result. Around one in seven venues (15%) could be forced to close.
In a joint statement, the trade bodies said: “Yet again, hospitality businesses enter April facing billions of pounds in additional costs, which will force many to make heart-breaking decisions.
Less investment
“Despite the necessary and welcome support for pubs on business rates, neighbourhood restaurants, local hotels and independent cafes all face their bills rising in the thousands.
“Hospitality’s tax burden – the highest in the economy – is suffocating the sector. The impact is clear: more lost jobs, less investment and business closures. The jobs, communities and livelihoods we support are hit once again.”
The increasing cost of energy was also found to be a significant concern for businesses.
Even when surveyed prior to the conflict in Iran and the Middle East, almost all respondents (93%) said energy costs were impacting profitability.
“The worrying situation facing the business energy market has the potential to accelerate all of these impacts.
Another crisis
“Even before the conflict in Iran and the Middle East began, increasing energy prices were already impacting profitability and the Government should be prepared to support vulnerable businesses if they are thrown into yet another crisis”, the statement continued.
Participants were united on the measures that would allow their businesses to grow, calling on the Government to introduce a VAT reduction for hospitality (89%), permanent reform of business rates (74%) and changes to employer National Insurance Contributions (65%).
With this targeted support, trade body members said they would be able to prioritise refurbishing and developing existing sites (70%), creating new jobs (46%) and opening new sites (27%).
The statement concluded: “Hospitality businesses are clear cutting their costs will deliver new jobs, investment and growth.
“The benefits of backing local pubs, restaurants, hotels, leisure and tourism businesses are obvious and if the Government works with our sector we can keep people in jobs, make our high streets flourish, and drive growth.”
