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Hospitality faces financial struggles as national debt hits record high

As colder, quieter months approach ahead of the festive season, many businesses in the hospitality industry are grappling with tighter financial margins. Sopro’s analysis of ONS data highlights the industries most affected by debt concerns this autumn.

The research shows that real estate activities top the list, with 9.7% of businesses expressing low confidence in meeting debt obligations. This is followed by accommodation and food services, where 8.6% of businesses share similar concerns. In third place, 7.2% of businesses in the health and social work sector report debt worries.

• Read more: Hospitality insolvencies jump 16%
  

The hospitality sector, which includes accommodation and food services, is particularly vulnerable as rising energy costs are expected to increase operational expenses. “As energy prices rise due to inflation, businesses may struggle to generate the cash flow necessary to meet their financial obligations,” the report notes.

Staffing costs are also a growing concern for hospitality businesses, with 33.3% reporting increased costs – the highest of any sector. With Halloween and Christmas on the horizon, demand for hospitality services rises, leading to the need for more temporary staff at higher rates. This further adds to the financial burden faced by businesses in the industry.

Steve Harlow, chief sales officer at Sopro, a multichannel B2B prospecting service, offered advice on how businesses can navigate the challenging months ahead. “Businesses can survive the challenging autumn months by tightening their sales and marketing tactics to generate new business, keep customers engaged, and maintain a steady stream of sales,” he said.

Harlow suggested increasing prospecting efforts to identify new clients. “It’s wise to ramp up your prospecting and lead generation efforts as we enter the quieter months,” he added. This can be done through targeted marketing activities such as emails, phone calls, and social media messaging.

He also advised businesses to closely monitor their sales funnel to improve conversion rates. “Regularly evaluate your leads and customer experience to identify areas for improvement,” Harlow continued.

Finally, Harlow encouraged businesses to adapt their marketing and sales efforts to fit the season. “Embrace the seasonal shift and use it to your advantage, incorporating seasonal messaging and deals to bolster interest,” he concluded.

• hospitality
• ONS
• Sopro
• Steve Harlow