More than half of hospitality businesses will reduce investment and cut staffing levels without business rates support, according to a new survey conducted between 9-25 October 2023.
Government action on business rates is viewed as a top priority by 60% of respondents, up 16% from August, according to the survey by UKHospitality, British Beer and Pub Association (BBPA), British Institute of Innkeeping (BII), and Hospitality Ulster.
The figures demonstrate the importance of the Chancellor extending hospitality sector relief and freezing the multiplier at the Autumn Statement, with 38% of hospitality venues failing to make a profit, according to the trade bodies.
Business optimism has slumped to 29% - down 10ppts from the summer – while 72% of respondents report more cautious consumers are purchasing fewer drinks when they go out.
Combined with energy bills 60% higher year-on-year and record food and drink inflation, 55% of respondents said they had not raised menu prices by as much as their own cost increases.
The survey follows a joint letter written to the Chancellor by trade bodies across the sector in October, urging the extension of business rates relief and a freeze in beer duty.
A joint spokesperson for the trade bodies said: “These figures lay bare the enormous impact inaction at the Autumn Statement would have on the hospitality sector. Pubs, restaurants, hotels, coffee shops, to name a few, will fall victim to a significant business rates bill, if relief expires and rates are hiked with inflation.
“Reducing investment and cutting staffing levels are the last thing venues want to do. In fact, they want to do the opposite, but their hands will be tied if rates increase to such an extent in April.
“Businesses are only able to absorb endless cost rises for so long and yet more pressure in the form of business rates will only force them to consider whether this is passed onto consumers.
“The Government must listen to the concerns of hospitality businesses, as the nation’s third largest employer, and extend the hospitality sector relief and freeze the business rates multiplier at the Autumn Statement, and as well as taking steps to reduce the overall tax burden on the sector in relation to business rates, VAT and excise duty.
“These businesses are at the heart of communities and high streets across the country, employing millions, generating economic growth and driving investment across our cities, towns and villages.
“Our economy cannot grow if hospitality cannot grow. The Government must act immediately to underpin this growth and ensure our pubs and hospitality venues survive.”
