More than two-thirds of hospitality businesses are operating at or below 85% of required capacity as tax rises continue to add strain to the sector, new data shows.
According to the latest member survey from the British Institute of Innkeeping (BII), the British Beer & Pub Association (BBPA), UKHospitality and Hospitality Ulster, 73% of respondents have less than six months of cash reserves, with one in five having no cash reserves at all.
As a direct result of April’s cost increases, 79% have increased prices and more than half have cut staff numbers.
It comes as 84,000 hospitality jobs have been lost since the budget, which has added a £3.4bn annual cost on the sector.
Hospitality businesses have since called on the government to provide a reduction in VAT, amend April’s changes to employer National Insurance contributions and deliver lower business rates for the sector.
“This shocking data reinforces the urgent need for government to recognise the incredible pressure hospitality businesses have been put under, particularly since April, and illustrates why it should come forward with measures to support this vital sector at the budget,” the trade bodies said in a joint statement.
“Unsustainable tax increases are squeezing businesses, stifling growth and investment, and threatening local employment, especially for young people.”
They said the sector is being forced to make “impossible decisions to cut jobs, put up prices, reduce opening hours” and limit support to local communities.
“Now is the time to act and back a vital British sector that supports the economy, jobs, and local communities. We urge the government to do so at the budget this autumn,” the trade bodies added.
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