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More than a third of pubs, restaurants and hotels risk closure by 2023, as they struggle with fewer bookings and rising food and energy costs.
A fresh interest rate rise on Thursday could deepen the cost-of-living crisis, leaving potential customers with even less money in their pockets.
An extensive survey of hospitality operators found that 35% of respondents expected to be operating at a loss or closing before the end of the year.
Commissioned jointly by UK Hospitality, the British Beer and Pub Association (BBPA), the British Institute of Innkeeping (BII), and Hospitality Ulster, the report found that three-quarters of operators had seen a reduction in customers. And 85% said they thought the worst was still to come.
The trade bodies said the situation facing hospitality businesses was “stark,” with many on the brink due to rising costs.
A statement said: “The vulnerability of the sector due to soaring energy costs, crippling rises in the cost of goods and dampening consumer confidence is on full display in this survey and, if urgent action isn’t taken, it is looking incredibly likely that we will lose a significant chunk of Britain’s iconic hospitality sector in the coming weeks and months.”
Tom Fox, Licensed Insolvency Practitioner at Umbrella Insolvency said: “Many hospitality businesses have still not fully recovered from the effects of government lockdowns, which put immense pressure on the industry.
“Operators have enjoyed some better times recently, but the recovery has been affected by rising costs, labour shortages, and lower demand.
“Many people look to cut down on non-essential spending when times are tough. This can have a massive impact on hospitality firms. The situation could arguably be worse this time round as consumers are affected by rising costs and rising interest rates, which increases the cost of mortgages and other borrowing.
“If you are worried about the future of your hospitality business, you should seek financial advice as soon as possible. The sooner you seek advice the more options you’re likely to have.”
For advice and more information about hospitality insolvency, contact a member of our team today. Call: 0800 611 8888.