A survey from UKHospitality, the British Beer and Pub Association, the British Institute of Innkeeping and Hospitality Ulster has found that 64% of hospitality businesses will cut jobs and 51% will cancel their investment plans as a direct result of today’s cost increases.
Just under half (42%) say they will also reduce trading hours and 15% will be forced to close.
The survey results emphasise the need for the Government to reduce the tax burden on the hospitality sector, with the trade bodies calling for a VAT reduction for hospitality, permanent reform of business rates, and changes to employer National Insurance Contributions.
These are all measures that would drive economic growth and help people into work, they say.
The increasing cost of energy is also a significant concern. When surveyed before the situation in Iran and the Middle East, almost all businesses (93%) said energy costs were impacting profitability.
A ‘suffocating’ tax burden
In a joint statement, the trade bodies say: “Yet again, hospitality businesses enter April facing billions of pounds in additional costs, which will force many to make heart breaking decisions.
“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 worrying situation facing the business energy market has the potential to accelerate all of these impacts.
“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.
“Hospitality businesses are clear that cutting their costs through a lower rate of VAT, business rates reform and changes to employer NICs will deliver new jobs, investment and growth.
“The benefits of backing our 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.”