Despite hospitality sales in 2022 topping pre-Covid levels, they remain significantly behind 2019 in real terms due to inflation, leaving 32% of businesses at risk of failure in the next year, according to figures from industry association UKHospitality.
The organisation’s quarterly tracker, in association with CGA, shows revenue was up 4.2% in 2022 compared to 2019, but down 13% in real terms when inflation is accounted for. It says that cost pressures – alongside ongoing labour shortages and Covid-19 debt – have left many hospitality businesses in a perilous position. The latest Q1 hospitality members survey, ran jointly by industry1, showed that almost a third (32%) of businesses were at risk of failure in the next year.
Kate Nicholls, chief executive of UKHospitality, said: “These figures show the challenging position the sector is in. The demand from the public is quite clearly there, with revenue exceeding pre-Covid levels, but there is no way venues can take advantage of this demand as they drown amidst price rise after price rise.
“Without action, we can see just how stark the year ahead could be with a third of businesses at risk of failure. Venues are simply unable to pass prices onto the consumer at the same rate they are experiencing their own costs rise.
Nicholls says that the government need to take action in the next budget to help business in the sector to get back on track: “If the Chancellor wants to stem the bleeding in hospitality and stop those prices rises, which unfortunately contribute to inflation, he can take action in the budget. We know one of the government’s key priorities is cutting inflation and growing the economy, which we support. Hospitality is a prime sector to achieve this, with a track record of delivering rapid growth.
“Intervening in the energy market to stop unscrupulous behaviour by energy suppliers, reforming the apprenticeship levy, and tackling disproportionate business rates, would signal his commitment to the everyday economy and its ability to lift the nation out of its economic slump.”
Printed Copy:
Would you also like to receive CIR Magazine in print?
Data Use:
We will also send you our free daily email newsletters and other relevant communications, which you can opt out of at any time. Thank you.
YOU MIGHT ALSO LIKE