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Third of hospitality businesses risk going bust in 2023

Published:  31 October, 2022

More than a third of the UK’s hospitality sector faces closure in 2023 due to the ‘cost of business crisis’.

A new survey by UKHospitality, the British Beer and Pub Association (BBPA), the British Institute of Innkeeping (BII) and Hospitality Ulster reveals that 96% of businesses are experiencing higher energy costs and 93% face food price inflation.

The organisations’ joint Q4 Hospitality Members’ Survey also showed that 35% of respondents are expecting to be operating at a loss or be unviable by the end of the year.

Another contributing factor is the cost-of-living crisis for customers, with more than three-quarters of operators (77%) seeing a decrease in people eating and drinking out, with 85% expecting this to worsen going forwards.

As a result, 89% are either not confident or pessimistic that the current levels of support offered by the government will protect the industry in the next six months.

In a joint statement, the trade associations said: “If the Government wants to be turbo-charging sectors of the economy, our dynamic hospitality industry is prime to grow. But it needs to survive this generational crisis first.

“Further business rates relief is absolutely critical to avoid businesses facing a cliff-edge in April next year and, in the long-term, a move to cut VAT for hospitality would do wonders in giving consumers the confidence they need to support their local hospitality businesses, which are so important to our local communities and the economy.

“We would all encourage the new Prime Minister to work with the sector on these suggested measures and what further action can be taken to ensure hospitality continues to thrive well into the future.”