Some 37% of business owners in the hospitality sector are considering closure or business exit, according to “worrying” survey results released by accountancy firm Armstrong Watson.
It comes as over 350 bar, restaurant, café, hotel and accommodation owners and providers shared their views on the current issues facing the sector, as well as the impact of government support.
Some 70% of respondents indicated that their “exit plans have significantly changed” in the wake of the pandemic.
While 80% of those surveyed had taken advantage of furlough, over half stated that “the phasing out of the scheme will put their business under significant financial threat”, while and 35% are expecting to make redundancies before the end of October.
The survey also found that cash flow is likely to be a very major issue, with 80% agreeing with the statement “cash flow will be a major issue for my business over the coming winter months”.
In addition, hospitality businesses have spent between £1,000 and £5,000 making their premises and working environments Covid-secure.
Richard Andrew, partner and Armstrong Watson’s head of hospitality said: It is incredibly worrying that the results suggest many business owners are reconsidering their exit plans and the future of their businesses.
“Whilst government initiatives such as Eat Out to Help Out, loan schemes and JRS have helped sustain businesses during the past few months, with further restrictions soon to come into force and Government schemes ending, unfortunately pressure upon these businesses is likely to increase.”
He added: “Whether the Government will look to introduce new support measures for the sector remains to be seen, however, our advice at this stage would be to carefully map out cash flow, understand your business position and liaise very closely with your advisers.”