More than a third of the UK hospitality industry is at risk of bankruptcy in early 2023 due to a lack of funds for doing business.
A joint survey of tourism infrastructure enterprises conducted by several relevant organizations in the fourth quarter of this year showed that 35% of respondents expect that they will be operating at a loss or become unviable by the end of the year, while 96% will face higher energy costs, and 93%—with a sharp increase in food prices.
Customers are also feeling the impact of the cost-of-living crisis, with more than three-quarters of service businesses (77%) seeing a decline in visitor numbers as people eat and drink less and less outside the home. 85% are pessimistic, they believe that the situation will only worsen in the future. As a result, 89% are unsure about the future, assessing the current levels of support offered by the government as insufficient to protect the industry in the next six months.
Continued uncertainty about rising inflation, future government regulation, and staffing have already created a crisis of confidence among business owners. Business confidence has fallen lower than it was even during the pandemic. The trade associations said in a joint statement: “The results clearly show the dire situation faced by hospitality businesses, many of which are on the brink of crisis due to rising costs. The main ones are a sharp rise in energy prices, an increase in the cost of products and goods, and a decrease in consumer confidence. “There is a good chance that we will lose a significant part of the UK’s iconic hospitality sector in the coming weeks and months.”
“We would all like to urge the new Prime Minister to pay attention to the industry, take urgent action, and consider the way forward to ensure that the hospitality industry survives today and continues to thrive in the future.”